Ishares Msci Japan Index Fund (AMEX:EWJ)
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Japanese company shares trading in New York stumbled Monday as investors digested the economic impact of last week's earthquake, and authorities tried to contain radiation from damaged nuclear reactors.
A closely watched fund that tracks Japanese stocks slid at the same time that American depository shares of companies like Honda Motor Co. Ltd. (HMC, 7267.TO), Toyota Motor Corp. (TM, 7203.TO) Sony Corp. (SNE, 6758.TO) suffered steep declines.
The iShares of MSCI Japan Index Fund (EWJ) fell 7.8% to $9.98 in recent trading on the NYSE Arca exchange after a modest 1.7% loss Friday. Flows of $1.2 billion into the ETF so far in 2011 had been among the highest in U.S.-listed funds prior to the quake.
"Until Friday this fund was one of the big winners in 2011 in terms of new money flows," Nicholas Colas, chief market strategist at BNY ConvergEx said in a report. "How much this trend reverses in coming days--and where this money goes--will be a useful sign of investor confidence in Japan."
Shares of auto makers fell after the companies extended halts in domestic production at least through Wednesday. Honda fell 4.3% to $38.05 and Toyota dipped 4.3% to $81.40 on the Big Board. Nissan Motor Co. Ltd. (NSANY, 7201.TO), whose shares trade over the counter in the U.S., fell 7.5% to $17.66. in recent trading.
Consumer electronics giant Sony Corp.'s shares fell 7.5% to $30.94 in New York after shutting operations at six manufacturing plants on Sunday. Computer hardware maker Canon Inc. (CAJ, 7751.TO) fell 4.9% to $43.33 and Kyocera Corp. (KYO, 6971.TO) traded 5.3% lower to $92.24.
Japanese financial companies also traded lower, with Mizuho Financial Group Inc. (MFG, 8411.TO) down 7.5% to $3.59, Sumitomo Mitsui Financial Group Inc. (SMFG, 8316.TO) off 6% to $6.48 and Nomura Holdings Inc. (NMR, 8604.TO) lower by 6.9% at $5.38 on NYSE. The Nikkei Stock Average plunged 6.2% in Tokyo Monday, its worst one-day percentage loss since December 2008.
North American stocks tied to uranium production and nuclear energy tumbled as Japanese authorities struggled to contain radiation from damaged reactors.
General Electric Co. (GE) led the Dow Jones Industrial Average's decline with a 2.4% drop. The company designed all six of the damaged reactors in Japan.
Shares of Canada-based Cameco Corp. (CCJ, CCO.T), the world's largest publicly traded uranium mining company, fell 15% to $31.48 on the NYSE. Between 10%-to-15% of Cameco's sales are to Japan, according to an estimate from TD Newcrest. The analysts noted that Japan accounted for approximately 12% of global uranium demand in 2010, and lowered its stock-investment rating on Cameco to "hold" from "buy."
Nevada-based Unanerz Energy Corp. (URZ) fell 24% to $3.00 and Texas-based Uranium Resources Inc. (URRE) traded down 25% to $1.74. Shares of Canada's Uranium Energy Corp. (UEC) fell 20% and Denison Mines Corp. (DNN, DML.T) fell 23% in U.S. trading.
Concerns on Wall Street that Japan's nuclear crises could spur higher costs and delays for new and existing nuclear plans weighed on plant operators. Entergy Corp. (ETR) fell 4.7% to $70.26 and SCANA Corp. (SCG) dipped 3.2% to $38.78 recently. Bank of America Merrill Lynch downgraded both stocks to "underperform" from "neutral" Monday, noting Japan's nuclear crisis could hamper expansion plans in the U.S.
-By Chris Dieterich, Dow Jones Newswires; 212-416-2611; firstname.lastname@example.org
-Yoshio Takahashi and Hiroyuki Kachi also contributed to this report