By Jeff Kearns and Mary Childs

Oct. 14 (Bloomberg) -- The Dow Jones Industrial Average climbed above 10,000 for the first time in a year, led by lenders, as U.S. stocks approached their highest levels since Lehman Brothers Holdings Inc.’s bankruptcy sent the global economy into a tailspin.

Bank of America Corp., American Express Co. and JPMorgan Chase & Co. more than doubled since the 30-stock gauge slid to a 12-year low on March 9 as global financial firms began recovering from $1.6 trillion in writedowns and credit losses. International Business Machines Corp. and Hewlett-Packard Co. jumped at least 52 percent on signs the nation was recovering from the worst recession in seven decades.

The Dow fell as much as 43 percent after Lehman filed the largest bankruptcy in September 2008 and dragged the financial system to the brink of collapse. Investors have returned to the stock market after the U.S. government lent, spent or guaranteed $11.6 trillion to shore up banks and revive the economy.

“A lot of people make fun of these milestones, but I think that it has an effect on psychology,” said David Darst, the New-York based chief investment strategist at Morgan Stanley Smith Barney, which has $1.4 trillion in client assets. “That can have an effect on tipping people over to being more worried about being out of the market.”

The measure rose as much as 130.52 points, or 1.3 percent, to 10,001.58 today after Intel Corp.’s sales forecast and earnings at JPMorgan topped analysts’ estimates.

Recovering From Rout

The Dow’s rally since March 9 recaptured almost half of its 7,617-point tumble from its record of 14,164.53 two years ago. The Dow, which first reached the five-digit milestone more than a decade ago, remains 29 percent below its Oct. 7, 2007, all- time high even after the biggest two quarter gain since 1987.

All 30 Dow companies have risen since the March low, led by Bank of America’s almost fivefold surge after the biggest U.S. bank by assets reported a first-half profit of $7.47 billion. American Express more than tripled for the second-best performance, followed by a near-tripling for JPMorgan.

The 113-year old benchmark closed above 10,000 for the first time on March 29, 1999, and went on to advance 25 percent that year for a ninth-straight annual gain. The gauge peaked at 11,722.98 in January 2000 before plunging 38 percent through October 2002 as the technology-stock bubble burst.

The Dow exceeded 10,000 again in December 2003, fell below five months later and then remained above every day from October 2004 to October 2008. It set a record high of 14,164.53 in October 2007 after surging 94 percent in five years. Nine months later, the gauge entered a bear market, marked by a decline of at least 20 percent, for the first time since 2002.

‘Fashion Staple’

“Ten years ago, the first time I was handed a Dow 10,000 hat, I never suspected it would be a fashion staple,” said Diane Garnick, who helps manage $413.9 billion as an investment strategist at Invesco Ltd. in New York. “And I don’t think this will be the last time we hit 10,000, because of the volatility in the market.”

The Dow swung in an average intraday range of 172 points this year and 281 points last year, higher than the 112-point average gap between the intraday high and low during the 2002- to-2007 bull market. The gauge moved in a record 1,018-point range on Oct. 10, 2008, as investors assessed the potential fallout of Lehman’s bankruptcy.

“It’s still going to be a volatile market but we think it’s sustainable and that we’re on track to go up from here,” said Peter Sorrentino, who helps oversee $13.8 billion at Huntington Asset Management in Cincinnati. “It’s an important psychological level that’s more an indication of the mom and pop money coming back into the market.”

Assets in Cash

Americans holding $3.45 trillion in cash may fuel further stock gains. U.S. investors have cash equal to about three- quarters of Standard & Poor’s 500 Index companies’ net assets, according to data compiled by the Investment Company Institute and Bloomberg. The measure was 62 percent at the peak of the bull market in 2007.

Former Federal Reserve Chairman Alan Greenspan said Sept. 30 that the U.S. economy will probably slow next year as the surge in stocks comes to an end.

“The odds are we flatten out,” he said of stocks in a Bloomberg Television interview. “That flattening out will put some sort of dull face on 2010.”

The Dow fell as much as 25 percent this year before erasing its drop on June 12 as confidence grew that the worst recession since World War II is ending. Speculation that government efforts will revive growth reversed the slide after the bankruptcy of General Motors Corp. and more than $100 billion of subprime losses at Citigroup Inc. led the gauge lower.

Economic Proxy

The index is intended to “provide a clear, straightforward view of the stock market and, by extension, the U.S. economy,” according to the Web site for Dow Jones, a unit of Rupert Murdoch’s News Corp. that bought the New York-based publisher for $5.2 billion in December 2007. The Journal’s editors select the firms in the Dow.

Dow Jones removed Citigroup Inc. and GM in June and replaced them with Cisco Systems Inc. and Travelers Cos., a precursor to Citigroup that originally joined the index in 1997 before changing its name to Citigroup Inc. in 1999. Since the index first topped 10,000 a decade ago, there have been 12 changes to the average’s companies.

The gauge, created on May 26, 1896, by Wall Street Journal co-founder Charles Dow, was initially valued at 40.94 and included American Cotton Oil, Chicago Gas, Distilling & Cattle Feeding, National Lead and Tennessee Coal & Iron. General Electric Co. is the only remaining original member, though it wasn’t in the average for nine years starting in 1898.

Dow 100

The Dow surpassed 100 in 1906 and reached 1,000 in 1972. It topped 5,000 in 1995 after jumping 1,000 points in nine months. It was made up of 12 stocks initially, increased to 20 in 1916 and expanded to 30 in 1928. The average’s biggest single-day point loss was 777.68, or 7 percent, on Sept. 29, 2008.

In this year’s third quarter, the Dow rallied 15 percent for the biggest advance since the fourth quarter of 1998, led by a 55 percent surge by Caterpillar Inc., the world’s largest maker of construction equipment. American Express and GE both gained more than 40 percent in the period, while Bank of America jumped 28 percent.

“The market’s strength over the last three months has been pulling investors off the sidelines and into the market,” said Michael James, a managing director at Wedbush Morgan Securities in Los Angeles. “I don’t think you’re going to see bulls completely walk away from the market.”

To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Mary Childs in New York at mchilds4@bloomberg.net.

Last Updated: October 14, 2009 13:24 EDT

 

JPMorgan Chase Reports Strong Profit of $3.6 Billion

Bankers were not always right. However, it is obviously that the job market is still "cool".

 

Oct. 6 (Bloomberg) -- The “disappointing” September employment figures indicate it will take the U.S. four years to recover all the jobs lost during the recession, according to economists at JPMorgan Chase & Co. in New York.

Last week’s report from the Labor Department reinforces “the message that even our above-trend growth forecast won’t deliver economic health,” wrote Bruce Kasman, JPMorgan’s chief economist, and David Hensley, director of global economic coordination, in an Oct. 2 note to clients.

JPMorgan projects the economy will expand at an average 3.5 percent pace in the second half of this year, almost a percentage point more than the median forecast of economists surveyed by Bloomberg in early September. The U.S. will grow 3.2 percent for all of 2010, according to JPMorgan, compared with the 2.4 percent projected by economists surveyed.

Even our forecast “would represent a very disappointing outcome against the backdrop of damage done during this recession,” Kasman and Hensley wrote. The three deepest recessions since World War II were followed by growth in excess of 5 percent on average in the first two years of recovery, according to their research.

Employers cut 263,000 jobs last month, exceeding the median forecast of economists surveyed by Bloomberg, and the unemployment rate climbed to a 26-year high of 9.8 percent, Labor Department data last week showed. A preliminary estimate also showed the world’s largest economy lost 824,000 more jobs than currently calculated for the year ended March 2009.

8 Million

That would bring the total drop in employment since the recession began in December 2007 to 8 million, rather than the 7.2 million now on the books.

“At a sustained 3.5 percent growth rate, it would likely take until sometime in 2013 before the economy restores the jobs lost in the downturn,” Kasman and Hensley said.

Companies moving into “expansion mode” is one “key pillar” of their forecast that has yet to be fulfilled, they said. Another -- an improvement in financial-market conditions - - “appears in place,” they said.

“The global economy is now rising on the back of a shift by firms away from aggressive retrenchment,” according to Kasman and Hensley. “However, sustainability will require more than a moderation in cuts. Firms will need to move into expansion mode by early next year.”

Anything short of that would raise the risk that the improvement in financial markets is undone and that consumer spending falters after government support wanes, they said.

Kasman and Hensley said they’ll be watching production figures from Asia, weekly jobless claims in the U.S. and October global business surveys to determine if their growth forecasts are on the mark.

“If we are right, these indicators should deliver solid outcomes, confirming that the march toward a sustainable recovery path may be bumpy but remains intact,” they said.

To contact the report on this story: Carlos Torres in Washington at ctorres2@bloomberg.net

Last Updated: October 6, 2009 00:01 EDT

Sept. 4 (Bloomberg) -- The pace of U.S. job losses slowed in August while the unemployment rate reached a 26-year high, signaling the recovery from recession will be slow to develop.

Employers cut payrolls by 216,000, fewer than forecast, after a 276,000 drop in July, Labor Department data showed today in Washington. The jobless rate rose to 9.7 percent; the so- called underemployment rate -- which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking -- reached a record 16.8 percent.

Today’s figures stoke concern that the recovery forecast to take hold in the second half of the year won’t prompt a turnaround in the job market until 2010. With the ranks of long- term unemployed nearing 5 million, workers are at risk of losing skills, making it even tougher for them to eventually find work.

“The economy is no longer detonating, but we are still losing jobs,” David Rosenberg, chief economist at Gluskin Sheff & Associates Inc. in Toronto, said in an interview with Bloomberg Radio. “It’s going to be a very tough environment for the consumer.”

Stocks fluctuated after the release, and the Standard & Poor’s 500 Index was up 0.3 percent at 1,005.99 as of 11:23 a.m. in New York. Treasuries were lower, with benchmark 10-year notes yielding 3.38 percent from 3.35 percent late yesterday.

Rising joblessness underscores Treasury Secretary Timothy Geithner’s judgment this week that it’s “too early” to start exiting from the unprecedented stimulus measures aimed at stabilizing the economy.

Lowering Costs

AMR Corp. and Whirlpool Corp. are among the companies continuing to cut staff to lower costs and revive profits in the aftermath of the deepest recession since the 1930s.

“The labor market lags behind the rest of the economy, so we are first going to have to see positive GDP growth,” Christina Romer, chairman of the White House Council of Economic Advisers, said in a Bloomberg Radio interview. While 9.7 percent unemployment is “a tragedy,” Romer noted that the pace of job losses has slowed from 741,000 in January.

Romer said the Obama administration’s $787 billion fiscal stimulus is working to boost growth and declined to comment on whether a second effort will be needed.

Revisions subtracted 49,000 from payroll figures previously reported for July and June. The drop for July is now calculated at 276,000, compared with the 247,000 previously reported.

Payrolls were forecast to fall 230,000 in August according to the median of 79 economists surveyed by Bloomberg News. The jobless rate was projected to rise to 9.5 percent. Analysts in a monthly Bloomberg survey projected the jobless rate will reach 10 percent by early 2010 and average 9.8 percent next year.   

Recession’s Toll

The latest numbers brought total jobs lost since the recession began in December 2007 to 6.9 million, the biggest decline in any post-World War II economic slump.

Among the 14.9 million unemployed Americans in August, 4.99 million were out of work for more than 26 weeks. The percentage of jobless who weren’t classified as on temporary layoff rose to 53.9 percent, up from 39.1 percent a year ago.

“Layoffs that we’re having are more structural and not cyclical, and that makes it more difficult to have a meaningful rebound in income growth, which is a key ingredient as I said for sustainable self re-enforcing expansion,” said Tony Crescenzi, a market strategist and portfolio manager at Pacific Investment Management Co., manager of the world’s biggest bond fund.

Breadth of Declines

All major job categories recorded losses in August, with construction payrolls tumbling 65,000, factories cutting another 63,000 and retailers firing 10,000 people.

Whirlpool, the world’s largest appliance maker, is among those firms still eliminating positions. The Benton Harbor, Michigan-based company said Aug. 28 it will close its Evansville, Indiana, manufacturing plant, resulting in the elimination of 1,100 jobs.

Fort Worth, Texas-based American Airlines, a unit of AMR, said this week it will furlough 228 flight attendants and put 244 more on involuntary leave.

Federal Reserve officials had “particular” concern about the job market when they met Aug. 11-12, minutes of the gathering showed this week.

“Long-term unemployment and permanent separations continued to rise, suggesting possible problems of skill loss and a need for labor reallocation that could slow recovery in employment begins to expand,” the Fed said in the minutes released Sept. 2.

Fed Rate Changes

Federal Reserve policy makers waited at least a year after unemployment peaked before raising interest rates in the aftermath of the previous two recessions.

Chairman Ben S. Bernanke, credited with preventing a second depression in winning nomination by President Barack Obama for a second term last month, has overseen a $1.2 trillion expansion of the central bank’s balance sheet to combat the credit crisis.

Today’s report also showed the average work week held at 33.1 hours in August. Average weekly hours worked by production workers remained unchanged from the month before, at 39.8 hours, while overtime also held at 2.9 hours. That brought the average weekly earnings up to $617.32 from $615.33.

“We’re still going to see some months of job cuts,” said Brian Bethune, chief financial economist at IHS Global Insight in Lexington, Massachusetts. “There is a whole range of options, like adding shifts or hours, that companies can put in place until it becomes necessary to hire people back.”

Workers’ average hourly wages rose 6 cents, or 0.3 percent, to $18.65 from the prior month. Hourly earnings were 2.6 percent higher than August 2008. Economists surveyed by Bloomberg had forecast a 0.1 percent increase from the prior month and a 2.2 percent gain for the 12-month period.

The U.S. recession “is bottoming out” and the economy is poised for “a slow return,” Alcoa Inc. Chief Executive Officer Klaus Kleinfeld said in a Sept. 2 interview. The head of the largest U.S. aluminum producer said government stimulus in the U.S. and China will affect the New York-based company’s earnings “positively” this year.

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

Last Updated: September 4, 2009 11:25 EDT

Aug. 31 (Bloomberg) -- Stocks slid worldwide, trimming a sixth straight monthly gain for the Standard & Poor’s 500 Index, as lower metals and oil dragged down commodity shares and banks fell on concern their rally outpaced the prospects for earnings.

China led the global slump as the Shanghai Composite Index tumbled 6.7 percent, the most since June 2008, and entered a bear market. Alcoa Inc., Freeport-McMoRan Copper & Gold Inc. and Exxon Mobil Corp. dropped as copper plunged the most in two months and crude fell below $71 a barrel. Morgan Stanley retreated 3.1 percent after Bank of America Corp. downgraded the shares following an 84 percent surge this year.

The S&P 500 fell 1 percent to 1,018.58 at 11:11 a.m. in New York, paring its August advance to 3.2 percent. The Dow Jones Industrial Average lost 77.24 points, or 0.8 percent, to 9,466.96. The MSCI World Index of 23 developed nations slid 0.9 percent.

“China and the U.S. are very economically linked right now,” said Michael Binger, a Minneapolis-based fund manager at Thrivent Asset Management, which oversees about $60 billion. “The stock markets are going to move together.”

The MSCI Asia Pacific Index dropped as investors speculated that lending curbs in China will damp growth in the world’s third-largest economy. The tumble in Chinese stocks increased demand for the relative safety of the yen. The Japanese currency was also boosted as the Democratic Party of Japan’s victory marked an end to single-party government that lasted almost unbroken for half a century.

U.S. energy and raw-material producers fell the most among 10 groups in the S&P 500 today, each losing more than 1.7 percent collectively, as all of the main industries declined.

Six-Month Rally

The S&P 500 is poised to trim its sixth straight monthly advance, the longest stretch of gains since January 2007. Morgan Stanley retreated 3.1 percent to $28.59. Bank of America analyst Guy Moszkowski cut the sixth-biggest U.S. bank by assets to “neutral” from “buy” because compensation costs are rising and the shares are “no longer deeply undervalued.”

Baker Hughes Inc., the world’s third-largest oilfield services provider, tumbled 7.3 percent to $35.31. The company agreed to buy BJ Services Co. for $5.5 billion to add to its natural-gas and deepwater businesses. BJ Services surged 10 percent.

Rising Valuations

Europe’s Stoxx 600 fell 0.7 percent, reducing its monthly advance to 4.9 percent. The rally has driven the price-earnings ratio for the index up to 48.6, the highest level since June 2003, according to weekly data compiled by Bloomberg. Trading in London was closed for a holiday.

The MSCI Asia Pacific Index slipped 0.9 percent. Baoshan Iron & Steel Co. dropped 7 percent after the company reported a 93 percent plunge in first-half profit. The Asian gauge is valued at 108 times the earnings of its 970 companies, the highest level since 2002, Bloomberg data show.

“There was more breadth to the global downturn than we’ve ever seen so it’s going to be very difficult to re-start the broader global economy,” said Stephen Roach, chairman of Morgan Stanley Asia Ltd., in an interview on Bloomberg Television. “It’s too early to put all this behind us.”

China Southern Airlines Co., the nation’s biggest carrier, fell 7.9 percent. First-half net income at the Guangzhou-based carrier tumbled 97 percent as it failed to repeat year-earlier foreign-exchange gains. Industrial Bank Co. and Aluminum Corp. of China Ltd. tumbled 10 percent after Caijing magazine reported new loan growth this month may be almost half that of July.

‘Bubble Territory’

The Shanghai Composite has slumped 23 percent to 2,667.75 since Aug. 4, more than the 20 percent drop that is the common definition of a bear market. China’s gauge is the worst performer this month among 89 benchmark indexes tracked by Bloomberg globally.

China’s economy isn’t “sustainable” and the Shanghai Composite “should be 2,000 or less,” former Morgan Stanley Asian economist Andy Xie said in a Bloomberg Television interview. He added that China’s market remains “in bubble territory.”

By Kathleen M. Howley and Brian Louis

Aug. 12 (Bloomberg) -- Home price declines in the U.S. accelerated in the second quarter, dropping by a record 15.6 percent from a year earlier, as foreclosures weighed on values.

The median price of an existing single-family home dropped to $174,100, the most in records dating to 1979, the National Association of Realtors said today. Total sales rose 3.8 percent to a seasonally adjusted annual rate of 4.76 million from the first quarter and fell 2.9 percent from 2008’s second quarter.

Prices fell in 129 out of 155 metropolitan areas from a year ago and 39 states experienced sales increases from the first quarter, the Chicago-based realtors group said. Sales in U.S. housing market at the heart of the global recession are beginning to stabilize, said Patrick Newport, an economist for Lexington, Massachusetts-based IHS Global Insight.

“I don’t think we’re at a bottom yet in home prices,” said Scott Anderson, a senior economist at Wells Fargo & Co. in Minneapolis. “There’s also a pretty big shadow supply of houses. People are kind of waiting for the bottom but there’s a pent-up supply out there.”

Home prices are falling even as a survey of economists indicates that the U.S. economy is recovering from the worst recession since the 1930s. The economy will expand 2 percent or more in four straight quarters through June, the first such streak in more than four years, according to the median of 53 forecasts in the monthly Bloomberg News survey.

Regional Price Declines

The median existing home price fell 9.7 percent in the Northeast from the same period a year earlier to $246,000, the group said. Sales jumped 15 percent from the first quarter and are down 8.4 percent from a year ago.

In the Midwest, prices fell 8.6 percent to a median of $146,800 from a year earlier. In the South, prices slid 10.3 percent to $158,600. In the West, they declined 26.6 percent to $212,600.

The largest decline was in the Cape Coral-Fort Myers metropolitan region, where the median price fell 53 percent to $84,000 from a year earlier. The second-largest decline was in the Las Vegas, Nevada, region, where prices fell 39.7 percent, followed by the Riverside-San Bernardino-Ontario metro area in California, where prices fell 39.1 percent.

The biggest increase in prices was in the Davenport-Moline- Rock Island area of Illinois and Iowa, where prices surged 30.6 percent to $113,200 from a year earlier. The second biggest jump was in the Cumberland metro area of Maryland and West Virginia, where prices rose 21.7 percent. The Elmira, New York, area had the third-biggest increase, where prices rose 11.3 percent.

Lower Rates

Home prices are tumbling even as mortgage rates remain near all-time lows. The average U.S. rate for a 30-year fixed home loan was to 5.22 percent last week, down from 5.25 percent the prior week, according to mortgage buyer Freddie Mac of McLean, Virginia. The rate dipped to 4.78 percent in April, the lowest ever recorded.

U.S. foreclosure filings -- notices of default, auction or bank seizure -- rose to a record in 2009’s first half, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data. More than 1.5 million properties, one in every 84 U.S. households, received a foreclosure filing, RealtyTrac said in a July 16 report.

Default Discounts

Homes in or near default typically sell for about 20 percent less than non-distressed property, according to the Realtors group. Those sales reduce the value of each surrounding home by an average $8,667 because the lower price is used by appraisers to set values for other properties in the area, according to the Center for Responsible Lending in Durham, North Carolina.

The world’s largest economy will contract 1.3 percent this year, according to a July 10 forecast by Fannie Mae. The U.S. unemployment rate may climb to 9.9 percent in 2010, from 9.3 percent this year, according to the mortgage buyer controlled by the U.S. government.

To contact the reporters on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net; Brian Louis in Chicago at blouis1@bloomberg.net.

Last Updated: August 12, 2009 11:23 EDT

July 16 (Bloomberg) -- China overtook Japan as the world’s second-largest stock market by value for the first time in 18 months, after government stimulus spending and record bank lending boosted share prices this year.

The Shanghai Composite Index rose 1.4 percent yesterday, sending the value of China’s domestic stock market to $3.21 trillion, compared with Japan’s $3.20 trillion, according to data compiled by Bloomberg. The Shanghai index has gained 75 percent this year, the best-performing major market, against a 7 percent advance in the Nikkei 225 Stock Average. The U.S. has the biggest equities market worth $10.8 trillion.

“China is just entering its stride and is still very much in a growth phase, while Japan is already a developed economy,” said Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Banking, which oversees about $14 billion.

China last surpassed Japan in stock-market capitalization from Jan. 4 to Jan. 24, 2008, data compiled by Bloomberg show. The Shanghai Composite tripled in the two years leading to its record on Oct. 16, 2007, before tumbling 72 percent to its trough the following November.

The Shanghai Composite added 0.1 percent to 3,191.80 as of 10:01 a.m. local time, while the Nikkei 225 advanced 2.2 percent to 9,475.04.

Government Stimulus

A government-led 4 trillion yuan ($585 billion) stimulus package and record bank lending has shielded the Chinese economy against a plunge in exports. Foreign-exchange reserves topped $2 trillion for the first time, while money supply rose a record 28.5 percent in June, the central bank said July 15. The economy expanded 7.9 percent in the second quarter, the statistics bureau said in Beijing today, more than the 7.8 percent median estimate of 20 economists surveyed by Bloomberg News.

New loans rose fivefold in June from a year earlier to 1.53 trillion yuan, increasing concern that attempts to revive the world’s third-largest economy will lead to bad debts and asset bubbles. Rapid credit growth poses risks for lenders and the financial system, Wang Huaqing, the disciplinary secretary of the China Banking Regulatory Commission, said on July 7.

BNP Paribas Securities (Asia) Ltd. last month cut its rating on China to “neutral” from “overweight,” citing valuations. Stocks on the benchmark index are trading at 33.2 times earnings, almost triple the 12.9 multiple on Nov. 4, when the measure dropped to its lowest since the financial crisis. Earnings per share declined 7 percent last year and will probably remain “flat” this year, the brokerage said.

Overvalued

“We share concerns that the corporate earnings recovery is not going to be very strong,” Erwin Sanft, head of China and Hong Kong equities research at BNP Paribas said in an interview with Bloomberg Television today. Some Chinese shares have soared by “1,000 percent from the bottom, so they’re pricing in a very strong rebound in earnings,” he said.

In Japan, nagging deflation and an aging population have sapped strength from what was once the world’s largest market by capitalization. During the 1990s, Japan spent 135 trillion yen on 10 economic stimulus plans and lowered interest rates to zero, none of which succeeded in promoting sustainable growth.

Japan’s economy shrank at a 14.2 percent annual rate in the first quarter, the most since data began in 1955. The country’s gross domestic output will shrink 3.4 percent in the year ending March 2010, the central bank predicted. The contraction coincided with a drop to a more-than 25-year low by the Topix index.

Japan’s Problems

“Japan has two main problems; the enormous public debt handicaps the government’s ability to spend additional money to boost the economy and we are too reliant on exports,” said Takashi Kamiya, chief economist at T&D Asset Management Co. in Tokyo, which helps oversee some $16 billion. “There’s no way to expect the emergence of a domestic growth driver that can propel us out of this funk.”

Chinese companies account for four of the 10 biggest companies when measured by market value, according to Bloomberg data. Toyota Motor Corp. is the top-ranked Japanese company, at 25th, worth about one third the capitalization of PetroChina Co., the world No. 1.

To contact the Bloomberg News staff on the story: Chua Kong Ho in Shanghai at kchua6@bloomberg.net; Patrick Rial in Tokyo at prial@bloomberg.net

Last Updated: July 15, 2009 22:16 EDT