Asian stocks drop

GLOBAL MARKETS/ STOCK REPORT

Asian stocks dropped on concern a rally that drove five of the region's six biggest markets to records in the past week more than reflects earnings prospects.

BHP Billiton, the world's biggest resources company, slid after crude closed below $80 a barrel for the first time in a week.

Posco, Asia's third-largest steelmaker, retreated after its biggest one-day gain in five years prompted South Korea's stock exchange to caution investors about the stock. China Mobile led declines in Hong Kong.

The Morgan Stanley Capital International Asia Pacific Index fell 1.2 per cent to 164.48 as of 5:16 pm in Tokyo. The decline snapped a five-day advance that drove the measure to a record. Japan's Nikkei 225 Stock Average, which failed to reach a high in the recent rally, lost 0.7 per cent to 17,077.26.

Europe
European bank stocks rose for a fourth day as investors speculated the worst of the credit turmoil is over. BNP Paribas SA and Royal Bank of Scotland Group paced the gains.

The Dow Jones Stoxx 600 Index added 0.2 per cent to 384.49 as of 11:01 am in London, with 10 of the 18 industry groups retreating. The index has climbed 9 per cent after reaching a five- month low on Aug. 16 on speculation contagion from the US housing recession has been contained.

National benchmarks advanced in 10 of the 18 western European markets. The UK's FTSE 100 added 0.9 per cent. Germany's DAX lost 0.2 per cent, and France's CAC 40 increased 0.3 per cent. The Stoxx 50 gained 0.3 per cent, while the Euro Stoxx 50, a measure for the euro region, climbed less than 0.1 per cent.

The Dow Jones Stoxx 600 Banks Index has rallied 54 per cent this week, heading for its biggest gain since March. Deutsche Bank AG yesterday posted an increase in third-quarter profit and Sanford C Bernstein said shares of U.K. lenders have fallen too much

US
US stock-index futures were little changed before reports that will provide investors with further clues about economic growth.

Standard & Poor's 500 Index futures expiring in December added 0.1 to 1,550.8 as of 10:20 am in London. Dow Jones Industrial Average futures decreased 3 to 14,049. Nasdaq-100 Index futures gained 0.5 to 2,121.25.

A Labor Department report due at 8:30 am in Washington today is forecast to show first-time jobless claims last week rose from a four-month low.

The government's September jobs report scheduled for release tomorrow.

"The thing to keep in consideration is tomorrow's jobs data,'' said Alessandro Capuano, a trader at IG Markets in London. "That will give a good indication of the conditions in the U.S. economy.''

Stocks fell the most in a week yesterday, led by technology companies, after Morgan Stanley recommended investors sell shares of Intel Corp and Advanced Micro Devices, the world's biggest makers of personal-computer processors.

The Dow Jones average climbed to a record this week. The measure has rallied 8.7 percent since touching a four-month low on Aug. 16, after banks including Citigroup Inc. signaled the worst of the credit crisis may be over.