* Asia markets shrug off U.S. gains, extend losses
* Safe haven bond prices rise amid economic gloom
* Oil gains on expectations OPEC will slash output
By Kevin Plumberg
HONG KONG, Oct 24 (Reuters) - Asian stocks fell on Friday,
led by a 4 percent drop in Japan's Nikkei, as the global
economic slowdown slashed earnings prospects for an array of
companies, forcing investors to look to safer government bonds.
The grip of the financial crisis has reached far beyond the
banking sector, with electronics maker Sony Corp and U.S.
online retailer Amazon.com Inc <AMZN.O> cutting their outlooks
in the face of weakening consumer demand.
The stronger yen has been particularly damaging to the
competitiveness of Japanese exporters as it curbs their
overseas profits when they are brought home and erodes the
competitiveness of their products.
A handful of companies that have expressed positive
outlooks have not been able to turn investor sentiment around
to focusing on value rather than on the uncertainty of economic
factors.
"Even where earnings outperform expectations, there is
still not a lot of good guidance going forward," said Diane
Swonk, chief economist for Mesirow Financial in Chicago. "It's
very hard to give guidance, even if you have done well. It's
very hard to know where the world is going."
Japan's Nikkei share average <> fell 3.8 percent, down
for a third day after hitting a 5-year low on Thursday, and
shrugging off late gains on Wall Street []. Sony slumped 13
percent and was one of the biggest decliners in the index.
"For the Japanese economy that has grown led by overseas
demand, the slowdown in the European and the U.S. economies is
directly hitting it," said Takahiko Murai, general manager of
equities at Nozomi Securities.
"Sony's revision this time probably won't mean its earnings
prospects have found a floor. There's a growing possibility
that the company will revise down earnings in March or the
first half of the next business year."
The MSCI index of Asia-Pacific equities traded outside of
Japan <.MIAPJ0000PUS> slipped 1.4 percent to a fresh 4-year low
and was on track for its eighth weekly loss.
South Korea's benchmark KOSPI index <> tumbled 2.6
percent to 3-year lows. Samsung Electronics stock <005930.KS>
led the index lower, down 4 percent, despite quarterly results
that beat forecasts.
Demand for low-risk U.S. Treasury bonds picked up as U.S.
stock futures and Asian equities fell.
The benchmark 10-year note <US10YT=RR> rose 15/32 in price,
pushing the yield down to 3.63 percent from 3.69 percent late
on Thursday in New York. The 2-year note yield slipped to 1.57
percent from 1.60 percent.
Government bonds in the euro zone, Japan and the United
States have been a haven for investors hoping to wait out the
market turmoil.
GRIM ECONOMIC OUTLOOK
Many economists are expecting rising unemployment in major
economies to curb consumer spending further, especially after
continued U.S. claims for unemployment insurance remained above
the 3 million high watermark for a 26th week and reports that
Goldman Sachs <GS.N> was cutting 10 percent of its staff.
The dollar rose against the euro and a basket of currencies
but was off two-year highs, as worries about the global economy
and emerging markets prompted U.S. investors to keep reducing
risky assets and repatriate funds.
The euro <EUR=> was down 0.4 percent at $1.2883 slipping
from an earlier high of $1.3007, but above a two-year low of
$1.2726 hit on Thursday.
The dollar index, which measures the dollar's value against
a basket of six currencies, was up 0.7 percent at 85.333, after
rising to a two-year high of 86.120 on Thursday.
The dollar eased 0.2 percent against the yen <JPY=> to
97.17 yen after falling to a seven-month low of 95.94 yen on
Thursday on trading platform EBS.
Crude oil <CLc1> rose by around a dollar to nearly $69 per
barrel on expectations that OPEC will agree to cut output at an
emergency meeting after slowing demand and the growing
financial crisis sent prices crashing from record highs set
this summer.
(Editing by Kim Coghill)
(Additional reporting by Gabriel Madway and Jim Finkle in SAN
FRANCISCO)
