Asian stocks slip

GLOBAL MARKETS/ STOCK REPORT

Asian shares fell, erasing early gains, after the New York Times reported Merrill Lynch will probably add $2.5 billion more in writedowns in the wake of the US sub-prime mortgage crisis.

Toyota Motor and Canon slid after the yen strengthened against the dollar following the report, reducing the value of their overseas sales.

Mitsubishi UFJ Financial Group and Macquarie Bank led lenders lower on concern that more losses related to investments backed by US home loans will follow.

The Morgan Stanley Capital International Asia-Pacific Index fell 0.2 per cent to 164.16 as of 7:02 p.m. in Tokyo, paring an earlier gain of as much as 1.5 per cent. A measure of consumer discretionary stocks slid 0.9 per cent, the biggest loss among the 10 industry groups included in the benchmark.

Japan's Nikkei 225 Stock Average fell 0.6 per cent to 16,358.39, reversing an advance of as much as 0.8 per cent. South Korea's Kospi Index dropped 0.8 per cent, after jumping as much as 2.8 per cent earlier.

Europe
European technology stocks rose after STMicroelectronics NV, the region's largest maker of semiconductors, said it expects sales to increase this quarter as the company delivers more chips to mobile-phone makers.

STMicroelectronics jumped the most in more than two months. Nokia, the world's biggest maker of mobile phones, also advanced.

AstraZeneca led pharmaceutical companies lower after Merrill Lynch cut its recommendation on the shares, citing increased competition from generic drugmakers.

US
US stock-index futures declined after reports that Merrill Lynch will increase its mortgage writedowns and Amazon.com forecast that profits may miss analysts' estimates.

Lehman Brothers Holdings Inc. and Bear Stearns Cos. also dropped. Amazon.com, whose shares topped $100 yesterday for the first time in almost eight years, fell in Germany.

Dow Jones Industrial Average futures sank 54 to 13,653. Nasdaq-100 Index futures slid 15.5 to 2,196.5. Standard & Poor's 500 Index futures expiring in December lost 7.7 to 1,517.7 as of 10:53 am in London.

The S&P 500 has declined 2.9 per cent since reaching a record on October 9, as lenders from Citigroup to Bank of America reported earnings that trailed analysts' estimates because of loan writedowns.

Financial shares have slid 7.3 per cent in the period, the worst performance among the S&P 500's 10 industry groups.