Japanese shares tumble 2nd straight session

Japanese shares tumbled sharply for a second straight session Monday, dragged down by growing gloom over corporate earnings and the state of the U.S. economy.

The benchmark Nikkei 225 Stock Average fell 156.09 points, or 1.19 percent, to 12,938.50 _ the first time the index has closed under the 13,000 level since July 18. The broader Topix index slid 1.94 percent to 1,248.25.

Investors continued the sell-off this week after driving the Nikkei down 2.11 percent Friday.

Automakers fell particularly hard, following news at the end of last week that U.S. auto sales slumped to a 16-year low in July as car makers were unable to keep up with consumers' growing demand for smaller, more fuel-efficient vehicles.

Mazda Motor Corp. plunged 8.76 percent to 552 yen after posting a 13 percent drop in North American sales during the month.

Nissan Motor Co. _ Japan's third largest carmaker _ lost 4.83 percent to 788 yen after reporting Friday that its net profit for the April-June quarter dropped 42.8 percent.

Also taking a beating was major trading house Mitsui & Co., which shed 8.60 percent to 1,956 yen. The company said Monday that its net profit for the first quarter through June fell 43.1 percent.

Banks continued their retreat as well, with Sumitomo Mitsui Financial Group down 6.90 percent at 729,000 yen and Mizuho Financial Group slumping 4.73 percent to 483,000 yen.

"Expectations for recovering earnings for banks were not high compared with last year, when there were prospects for interest rate hikes," said Deutsche Securities analyst Shin Tamura in a research note. "Flagging (net operating profit), higher credit costs, and indications that profits will be disappointing ahead have continued exerting downward pressure on bank stocks," he said.

Gainers included communication, pharmaceutical and electric and gas issues.

In currencies, the dollar gained slightly to 107.81 yen late Monday afternoon from 107.68 late Friday. The greenback climbed against the euro, which was trading at US$1.5586 from US$1.5564.