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Japanese stocks fell ahead of a meeting of central bankers this week as investors questioned whether any stimulus announced by Federal Reserve Chairman Ben S. Bernanke would be enough to prop up a weakening U.S. economy.
Toyota Motor Corp. (7203), the world’s biggest carmaker, dropped 1.6 percent. Sony Corp., Japan’s No. 1 exporter of consumer electronics, slid 2.9 percent. Mitsubishi UFJ Financial Group Inc. (8306) led banking shares lower after Moody’s Investors Service downgraded the debt ratings of Japan’s biggest lenders. Moody’s also lowered its rating on Japanese sovereign debt.
The Nikkei 225 Stock Average dropped 1.1 percent to 8,639.61 at the 3 p.m. close of trading in Tokyo after weaker weaker-than-estimated U.S. economic data eroded investor confidence ahead of a meeting this week in Jackson Hole, Wyoming, where Bernanke is expected to signal new stimulus.
Japanese shares extended declines in afternoon trading after measures announced by Finance Minister Yoshihiko Noda to protect Japanese exporters failed to weaken the yen. The Topix index dropped 1.1 percent to 742.24.
European stocks climbed for a third day after a report on U.S. durable-goods orders beat forecasts amid ongoing speculation that the Federal Reserve will act to bolster the economy.
Daimler AG (DAI) and Fiat SpA (F) led a gauge of automakers to the biggest gain in 13 months. Ageas, the majority owner of Belgium’s largest life insurer, surged 21 percent after announcing a buyback. WPP Plc (WPP), the world’s largest advertising company, advanced 7.4 percent as profit beat estimates. Heineken NV (HEIA), the world’s third-biggest brewer by volume, tumbled the most since 2003 after saying earnings are unlikely to grow this year.
The Stoxx Europe 600 Index rose 1.4 percent to 229.79 at the 4:30 p.m. close in London, extending the advance from the two-year low reached at the end of last week to 3 percent. The gauge has still fallen 21 percent from this year’s peak on Feb. 17 as European and U.S. economic data that trailed economists’ forecasts added to concern the global recovery is at risk.
“Everyone is waiting for Friday’s meeting of the Federal Reserve,” said John Plassard, a director at Louis Capital Markets in Geneva. “Until then, every bit of good news, such as the strong durable-goods numbers, will support the markets.”
U.S. stocks rose, extending the biggest rally for the Standard & Poor’s 500 Index in a week, after reports on durable-goods orders and home prices beat forecasts and financial companies advanced.
Bank of America Corp. (BAC) surged 9.2 percent after Meredith Whitney, who predicted Citigroup Inc. (C)’s dividend cut three years ago, said it has no urgent need to raise capital. A gauge of 12 homebuilders in S&P indexes increased 1.7 percent. Newmont Mining Corp. (NEM) slumped 2.4 percent after gold futures plunged the most since 2008 as demand for haven waned.
The durable-goods data wiped out a 1.4 percent retreat in futures on the index. The Dow Jones Industrial Average added 72.13 points, 0.7 percent, to 11,248.89.
“Any time you see life in the walking dead, it certainly makes you feel a lot better,” Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private- banking unit of KeyCorp in Cleveland, said in a telephone interview. “There’s so much pessimism priced into the market that if we get any decent news, it’s going to buoy investors’ spirits. If investors can be reassured that a disaster is not imminent, that’s good for the market.”
With traders awaiting a speech on Aug. 26 by Federal Reserve Chairman Ben S. Bernanke in Jackson Hole, Wyoming, trading is being affected more than usual by levels monitored by analysts who base forecasts on price and volume history.
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