Asia Day Ahead: U.S. Stocks Drop as S&P 500 Slumps for 3rd Day on Earnings

The following are the top Asia stories for the day.

TOP STORIES/MOST READ ON BLOOMBERG

U.S. Stocks Fall as S&P 500 Slumps for Third Day on Earnings

U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a third day, as earnings and forecasts that disappointed investors at technology and consumer-dependent companies wiped out an early advance.

U.K. Bonus Plan to Cover 2,500 Banks, Funds, FSA Says (Update2)

The U.K. financial regulator proposed expanding the firms covered by rules on bonuses and compensation from 27 to 2,500 banks, building societies and hedge funds to comply with European Union legislation.

Jobless Claims in U.S. Declined by 11,000 to 457,000 (Update1)

The number of Americans filing first-time claims for unemployment insurance fell to 457,000 last week, a figure that signals the labor market will be slow to improve even as the economy grows.

Volatility Trade Buffett Embraced Backfiring for Hedge Experts

A bullish stock market trade embraced by the smartest money is backfiring. And that has investors wondering if what Warren Buffett and Goldman Sachs Group Inc. know about derivatives is obsolete.

MAIN ECONOMIC RELEASES: Figures are based on Bloomberg survey of economists:

Japan Consumer Prices Seen Falling 1.1% From Year Earlier Japan Unemployment Rate Seen Staying at 5.2% in June Japan Industrial Production Seen Rising 0.2% in June New Zealand Releases Building Approvals Figures in Wellington South Korea Releases Industrial Production Figures Australian Loan Growth Seen Accelerating to 3.1% on Year Singapore Unemployment Rate Seen Falling to 2.1% in 2nd Quarter Japan Housing Starts Seen Rising 1.8% in June Thailand Releases Trade, Foreign Reserve Figures in Bangkok Sri Lankan Inflation Rate Seen Easing to 4.6% in July Pakistan Seen Keeping Benchmark Interest Rate at 12.5%

MAIN ANALYST UPGRADES/DOWNGRADES: *Dongfeng Motor Corp Raised to ‘Overweight’ at JPMorgan *CJ Cheiljedang Cut to ‘Hold’ at Deutsche Bank *Ryman Healthcare Raised to ‘Buy’ at UBS *HTC Corp Raised to ‘Neutral’ at JPMorgan *Vedanta Cut to ‘Reduce’ at AlphaValue

ASIAN MARKETS

The Nikkei 225 futures contract due in September fell 30 to 9,700. The Hang Seng Index futures contract for August rose 129 to 21,161. The S&P/ASX 200 Index futures contract due in September fell 14 to 4,494 at 6:59 a.m. in Sydney.

Romick Holds Cash Like Klarman in ‘Free-Range Chicken’ Fund

Steven Romick says he aims to beat the market when stocks are falling and underperform by a smaller margin when they’re rising.

Treasury 7-Year Notes Pare Gains After Lower Demand at Auction

Treasury seven-year notes pared gains after an auction of $29 billion of the securities, the last of three note offerings this week that totaled $104 billion, drew lower demand than forecast.

Euro Rises to $1.31 for First Time Since May on Economic View

The euro climbed to $1.31 for the first time in almost three months as European confidence in the economic outlook rose to the highest level in more than two years this month and German unemployment decreased.

European Stocks Drop for Second Day; Nestle, Unilever Decline

European stocks fell for a second day as food and basic- resource companies retreated and concern mounted that tomorrow’s U.S. gross domestic product report may show growth slowed in the world’s largest economy.

Bund Yield Rises Most in a Month as Data Shows Economy Improves

German 10-year bonds posted their biggest weekly loss in more than a month as signs that the economic recovery may be gathering pace reduced demand for the relative safety of government bonds.

N.Y. Crude Oil Futures Increase 0.3%, Rebounding From Decline

Oil futures advanced in New York after opening lower. Crude for September delivery rose 22 cents, or 0.3 percent, to $77.21 a barrel at 9:28 a.m. on the New York Mercantile Exchange.

Barrick Profit Rises on Gold Price; Dividend Boosted (Update3)

Barrick Gold Corp., the world’s largest producer of the metal, said second-quarter profit increased 59 percent and raised its dividend as prices climbed to a record.

HIGHLIGHTS FROM NEWSPAPERS:

Graincorp to Bid for AWB Units as Gavilon Exits, Review Reports

Graincorp Ltd. will buy into AWB Ltd.’s grain trading business in Geneva and half of its Australian trading unit after Gavilon LLC walked away from talks on a deal, the Australian Financial Review reported in its Street Talk column, without saying where it got the information. The Graincorp pact might be announced as early as today, according to the report.