March 14 (Bloomberg) -- Japan's Nikkei 225 Stock Average fell for a second day in three. Advantest Corp. led technology shares lower after cutting its full-year profit forecast because of a slowdown in capital spending by its customers.

``Investors are watching for the bottom in the semiconductor industry, but the upside potential for their shares isn't so great,'' said Masaki Iso, who oversees $6.3 billion as head of Japanese equities at Yasuda Asset Management Co. ``Business will continue to struggle for another couple of quarters.''

Financial stocks such as Mitsubishi Tokyo Financial Group Inc. and retailers including Marui Co. gained after the government said the world's second-largest economy grew in the fourth quarter, reversing an earlier estimate of a contraction.

The Nikkei fell 39.40, or 0.3 percent, to 11,884.49 at 2:26 p.m. in Tokyo. The broader Topix index was little changed, slipping 1.24 points to 1198.76.

Nikkei 225 futures expiring in June fell 0.4 percent to 11,840 in Osaka and lost 0.3 percent to 11,845 in Singapore. Some 1.06 trillion yen ($10.1 billion) in shares have traded so far, compared with the daily three-month average of 1.21 trillion yen.

Three stocks fell for every one that rose on the Tokyo Stock Exchange's first section.

Advantest, the world's biggest maker of equipment used to test memory chips, dropped 240 yen, or 2.7 percent, to 8,580.

Tokyo Electron, Elpida

After the market closed on March 11, the company cut its full- year profit forecast by 9.3 percent to 39 billion yen ($375 million) as sales fall short of estimates on a slowdown in equipment orders by customers.

Technology shares also fell after Intel Corp.'s sales forecast last week failed to lift semiconductor shares in the U.S. The Philadelphia Semiconductor Index slumped 2.9 percent on March 11 as all 19 members, including Intel, dropped.

Tokyo Electron Ltd., the world's second-largest maker of chip- production equipment, dropped 190 yen, or 2.9 percent, to 6,280. Elpida Memory Inc., Japan's largest memory chipmaker, declined 130 yen, or 3 percent, to 4,190.

Mitsubishi Tokyo, the nation's No. 2 lender, rose 5,000 yen, or 0.5 percent, to 970,000. Sumitomo Mitsui Financial Group Inc., third largest, gained 7,000 yen, or 0.9 percent, to 751,000.

Marui Co., a department-store operator, climbed 50 yen, or 3.5 percent, to 1,495. The stock was raised to ``outperform'' from ``in-line'' by Hidehiko Aoki, an analyst at Goldman, Sachs & Co.'s unit in Tokyo. Seven Eleven Japan Co., Japan's largest convenience store chain, gained 10 yen, or 0.3 percent, to 3,190.

Better-Than-Expected

Japan's economy grew at a 0.5 percent annual pace in the fourth quarter, compared with a previous estimate of a 0.5 percent rate of decline, the government said.

Economists surveyed by Bloomberg News expected a median 0.6 percent drop. Quarter-on-quarter, the economy grew 0.1 percent, compared with an earlier estimate of a 0.1 percent contraction.

The revised figure bolstered optimism that economic growth is gaining momentum. Industrial production in January rose 2.1 percent, the biggest gain in nine months, while consumer spending that month had the largest increase since April.

``The economic outlook is better than we had expected and shows there's room for more share gains,'' especially for domestic demand-related shares, said Yasuda's Iso.

Livedoor Co., an Internet company which is locked in a takeover battle with Fuji Television Network Inc. for Nippon Broadcasting System Inc., surged 22 yen, or 6.5 percent, to 360.

The company won a court injunction March 11 against a stock sale designed by Nippon Broadcasting to Fuji TV to thwart its bid.

Shareholders' Rights

The Tokyo District Court ruling blocked the sale of stock options by Nippon Broadcasting to Fuji TV, Japan's biggest television network. The share sale would have diluted Livedoor's 40 percent stake in Nippon Broadcasting and increase Fuji TV's 39 percent voting rights to a majority share.

Nippon Broadcasting gained 700 yen, or 11 percent, to 7,000, while Fuji TV fell 1,000 yen, or 0.4 percent, to 234,000.

``Shareholders' rights were granted,'' said Toru Ohara, who oversees $4.2 billion as chief investment officer at Franklin Templeton Investments Japan Ltd. in Tokyo.

Takefuji Corp., Japan's third-largest consumer finance company, slumped 440 yen, or 5.6 percent, to 7,370, set for its biggest decline in 10 months. The company's president, Megumu Motohisa, stepped down after less than a year in charge.

Motohisa, recruited to help restore investor confidence after a wiretapping scandal involving Takefuji founder Yasuo Takei, left for personal reasons, the company said.

Copper Price

Copper producers declined after the price of the metal declined. Sumitomo Metal Mining Co., Japan's third-largest copper producer, fell 18 yen, or 2.1 percent, to 839. Dowa Mining Co., a copper and zinc smelter, dropped 22 yen, or 2.9 percent, to 748.

Copper for delivery in May on the Shanghai Futures Exchange, the most actively traded, fell 0.6 percent to 31,010 yuan ($3,747) a ton, the largest fall since March 4.

Elsewhere, Ishikawajima-Harima Heavy Industries Co., Japan's third-largest maker of heavy machinery, climbed 10 yen, or 5.5 percent, to 192, the highest since July 2002.

The stock advanced on speculation companies with land and real estate holdings in the greater Tokyo area will benefit as a recovery in land prices lifts property values, according to Yasuo Yabe, an investment adviser at Meiwa Securities Co. in Tokyo.

The company last month announced it was selling land it owns in Tokyo to Mitsui Fudosan Co. for 10 billion yen.

To contact the reporter on this story: Michael Tsang in Tokyo at mtsang1@bloomberg.net.

Last Updated: March 14, 2005 00:30 EST