Asian stocks fell, led by Tokyo Electron Ltd. and Samsung Electronics Co., after Lehman Brothers Holdings Inc. cut its profit forecast for Intel Corp. and earnings were less than expected at some U.S. technology companies. Toyota Motor Corp. and Hyundai Motor Co. declined on concern demand for exports from the U.S. will slow as a gauge of service industries in the world's biggest economy fell.
The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks in the region, shed 0.3 percent to 89.72 at 1 p.m. in Tokyo. Japan's Nikkei 225 Stock Average lost 0.9 percent and South Korea's Kospi index slid 1 percent. ``Economic growth prospects and earnings conditions are starting to go out of order,'' said Jun Terasaka, who helps manage the equivalent of $9.2 billion at Toyota Asset Management Co. in Tokyo. ``We're in for a long declining phase.'' He said food and drug stocks are good investments, without naming them. Airlines including Qantas Airways Ltd. and Korean Air Co. also declined after the price of crude oil surged to a one-month high in New York, sparking concern higher fuel costs will hinder earnings growth. All other benchmarks in the region fell, except for those in Taiwan, New Zealand and the Philippines.
Tech Slide
The MSCI Asia-Pacific Information Technology Index had the biggest drop among the regional index's 10 industry groups, falling 1.6 percent. Tokyo Electron, which supplies its chip-making equipment to Intel, slumped 1.4 percent to 5,740 yen. Samsung Electronics, the world's No. 2 semiconductor maker after Intel, shed 2.5 percent to 430,000 won. Advantest Corp., the world's biggest maker of equipment used to test computer memory chips, sank 1.2 percent to 6,820. Taiwan Semiconductor Manufacturing Co., the world's largest maker of made- to-order chips, shed 2.2 percent to NT$45. In the U.S., Lehman cut its third-quarter profit forecast for Intel, the world's largest chipmaker, to 30 cents a share from 31 cents, on ``subdued'' demand for personal computers. The company is due to report second-quarter earnings on July 13. Conexant Systems Inc., the maker of semiconductors for high- speed modems and cable television set-top boxes, and Veritas Software Corp., the No. 2 maker of data-storage software, reported quarterly results that lagged their own forecasts. The Nasdaq Composite Index, which gets 40 percent of its value from computer stocks, dropped 2.2 percent for its biggest decline in almost four months. The Philadelphia Semiconductor Index, which tracks 18 chip-related stocks, sank 4 percent.
U.S. Economy
Toyota, the world's largest automaker by market value, dropped 1.8 percent to 4,270 yen. Toyota gets 80 percent of its operating profit from North America. Hyundai, South Korea's largest carmaker, shed 1.4 percent to 41,000 won. The company gets about a fifth of its sales from the U.S. The Institute for Supply Management's index of U.S. financial services, construction, retail and other non-manufacturing industries dropped to 59.9 in June, the lowest since December, from 65.2 a month earlier. The drop was the largest since the aftermath of terrorist attacks on New York and Washington. Reports last week showed U.S. job gains and auto sales in June were less than some economists expected. Slowing growth in the U.S., the biggest destination for the region's exports, may reduce exporters' overseas sales. ``You can't expect earnings and economic growth to continue the way they have,'' said Teruhisa Ishikawa, a manager at Mizuho Investors Securities Co. in Tokyo. ``They are going to slow and that's going to prompt more selling for a while.''
Crude Oil
Qantas, Australia's biggest airline, fell 2.5 percent to A$3.46. Korean Air, the nation's largest air carrier, slid 3 percent to 14,400 won. Japan Airlines Corp., Asia's largest airline, dropped 0.6 percent to 338 yen. Jet fuel typically makes up between 15 percent and 20 percent of an airline's costs. Crude oil for August delivery rose 3.3 percent in New York to $39.65 a barrel, the highest closing price since June 2. A damaged pipeline cut has exports from Iraq, the Middle East's fifth- largest producer, by about half. New York oil prices have risen 11 percent from a 10-week low a week ago. ///www.bloomberg.com