March 14 (Bloomberg) -- Japanese stock benchmarks declined 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.''

Retailers including Marui Co. and financial stocks such as Mitsubishi Tokyo Financial Group Inc. 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 225 Stock Average fell 73.64, or 0.6 percent, to 11,850.25 at the 3 p.m. close in Tokyo. The broader Topix index slid 4.55, or 0.4 percent, to 1195.45.

Nikkei 225 futures expiring in June fell 0.6 percent to 11,820 in Osaka and lost 0.5 percent to 11,820 in Singapore. Some 1.33 trillion yen ($12.7 billion) in shares traded, 10 percent more than the three-month daily average. Four stocks fell for every three that rose on the Tokyo Stock Exchange's first section.

Advantest, the world's biggest maker of equipment used to test memory chips, dropped 260 yen, or 3 percent, to 8,560.

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 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 150 yen, or 3.5 percent, to 4,170.

Marui, a department-store operator, climbed 39 yen, or 2.7 percent, to 1,484. 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, rose 10 yen, or 0.3 percent, to 3,190.

Mitsubishi Tokyo, the nation's No. 2 lender, rose 3,000 yen, or 0.3 percent, to 968,000. Sumitomo Mitsui Financial Group Inc., third largest, gained 5,000 yen, or 0.7 percent, to 749,000.

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., gained 12 yen, or 3.6 percent, to 350.

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 surged 850 yen, or 13 percent, to 7,150, 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 430 yen, or 5.5 percent, to 7,380, the 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 20 yen, or 2.3 percent, to 837. Dowa Mining Co., a copper and zinc smelter, dropped 18 yen, or 2.3 percent, to 752.

Copper for delivery in May on the Shanghai Futures Exchange, the most actively traded contract, 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 11 yen, or 6 percent, to 193, its 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.

Advantest Corp. (6857 JT)
Dowa Mining Co. (5714 JT)
Elpida Memory Inc. (6665 JT)
Fuji Television Network Inc. (4676 JT)
Ishikawajima-Harima Heavy Industries Co. (7013 JT)
Livedoor Co. (4753 JT)
Marui Co. (8252 JT)
Mitsubishi Tokyo Financial Group Inc. (8306 JT)
Nippon Broadcasting System Inc. (4660 JT)
Seven-Eleven Japan Co. (8183 JT)
Sumitomo Metal Mining Co. (5713 JT)
Sumitomo Mitsui Financial Group Inc. (8316 JT)
Tokyo Electron Ltd. (8035 JT)

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

Last Updated: March 14, 2005 01:28 EST