* Asia stocks fall on economy worries, but less than Wall
St
* Yen slips in light trade as markets calm, volatility
drops
* US automaker help eyed; oil near 20-mth low
* US yield curve steepest in 5 years
(Adds European outlook, updates prices)
By Eric Burroughs
HONG KONG, Nov 12 (Reuters) - Asian shares fell for a
second day on Wednesday and oil prices hovered near a 20-month
low as poor corporate earnings highlighted the damage from the
global economic slowdown on companies and consumers.
The yen surrendered gains as Asian markets held up better
than Wall Street, with Japan's Nikkei average dipping 1.3
percent on the lightest volume in about six weeks. Shares of
commodity-linked companies led the drop.
Financial bookmakers called for a rise in European shares
of nearly 2 percent, but analysts confessed that investors had
few reasons to be optimistic.
"The worst of the financial crisis may be over, but we now
face this problem that we don't know how much worse the economy
will deteriorate and where it will find a floor," said Koichi
Ogawa, a chief portfolio manager at Daiwa SB Investments in
Tokyo.
Among the bleak news on Wednesday, Japanese consumer
confidence in October slid to the lowest since records began in
1982. In South Korea, job growth weakened to a 3-1/2-year low.
"The news is very, very bad. It's bad because there is a
global recession," said Jan Lambregts, head of Asia research at
Rabobank in Hong Kong. "We still have a couple of tough
quarters, and even then the recovery will not look good."
The MSCI benchmark index of Asian stocks outside of Japan
lost 0.8 percent. On Tuesday the S&P 500 shed 2.2 percent on
news of faltering demand at aluminium maker Alcoa and a dismal
outlook from conglomerate Tyco International
Trading activity remained sluggish as many investors stuck
to the sidelines, choosing to sit out the final months of
what's been a brutal year as they try to assess how deep a
recession the global economy faces.
Day-to-day swings across assets were steadily falling from
the historically steep volatility seen in October as investors
grappled with a deteriorating outlook as well as government
efforts to revive growth, from hefty interest rate cuts to
fiscal spending.
China at the weekend launched a nearly $600 billion
economic stimulus package aimed at infrastructure spending, a
move that gave a fleeting boost to equities and investor
confidence.
WOES ALL AROUND
The troubles in the United States cast a shadow on the rest
of the world. Shares of General Motors slid to a 65-year low of
just $2.92 on mounting doubts about whether it can avoid
bankruptcy.
U.S. automaker woes have prompted Congress to consider
emergency aid that could be passed as soon as next week.
Traders said the prospect of near-term assistance to U.S.
automakers helped lift S&P 500 futures 12 points, or 1.3
percent, in Asia trade.
The yen -- which tends to trade closely with stocks due to
its role in the carry trade -- gave up initial gains as stocks
trimmed losses.
The dollar was flat from U.S. trade at 97.70 yen while the
euro climbed 0.6 percent to 123.07 yen In emerging markets, the
Korean won dropped 2.2 percent on the downbeat economic
reports.
The stock market losses in Asia and on Wall Street the
previous day gave a lift to safe-haven Treasuries, which traded
again after U.S. bond markets took a break for the Veterans Day
holiday on Tuesday.
The benchmark 10-year Treasury note gained 11/32 in price
to yield 3.720 percent, down about 4 basis points from Monday's
close.
The yield curve between two- and 10-year yields steepened
slightly to 251 basis points, the highest in five years on
expectations for another sharp Federal Reserve rate cut and
increased bond supply to fund the U.S. government's array of
bailouts.
A deteriorating global economic outlook has also cast doubt
about demand for commodities, driving oil prices down.
U.S. crude oil edged up 5 cents a barrel to $59.38, after
falling as far as $58.32 the previous day, the lowest since
March 2007 and down more than $80 from record peaks hit in
July.
(Additional reporting by Aiko Hayashi in Tokyo; Editing by
Dhara Ranasinghe)
