* Sumitomo Realty drops, brokerage says looks overpriced
* Investors eye U.S. bank results, Japan firms' earnings
By Aiko Hayashi
TOKYO, April 14 (Reuters) - The Nikkei stock average fell 1.3
percent on Tuesday as automakers like Toyota Motor <7203.T> slid
amid fears of GM <GM.N> going bankrupt, while Sumitomo Realty &
Development <8830.T> sank after a brokerage recommended selling
the stock.
Analysts said investors were also taking a breather after the
market's recent gains and have turned cautious before the
corporate earnings season in the United States and Japan.
"If GM were to go bankrupt, that would raise questions about
what would happen to Japanese auto-parts makers and Japanese
automakers' dealer networks. The implications are broad," said
Takahiko Murai, general manager of equities at Nozomi Securities.
"Although the financial sector seems to have seen the worst,
a recovery for manufacturers has been slow and worries remain."
The benchmark Nikkei <> shed 113.35 points to 8,811.08,
while the broader Topix <.TOPIX> slipped 1.2 percent to 838.68.
Investors are closely watching U.S. bank results due this
week, with JPMorgan <JPM.N> set to report results on Thursday and
Citigroup <C.N> on Friday. []
Goldman Sachs <GS.N> surprised investors after the close on
Monday by posting stronger-than-expected quarterly results a day
early, and announced a $5 billion public offering of common
equity. []
"Although U.S. bank earnings appear to be improving, problems
related to bad loans still remain. It's not as if everything were
OK now," said Murai at Nozomi Securities.
The Standard & Poor's 500 Index <.SPX> rose 0.3 percent but
the Dow Jones industrial average <> dipped 0.3 percent,
weighed down by a profit warning from Boeing <BA.N>. []
AUTOMAKERS SLIDE
Toyota lost 3.6 percent to 3,800 yen, Honda Motor Co <7267.T>
shed 3.9 percent to 2,720 yen, and Nissan Motor Co <7201.T>
dropped 6.1 percent to 492 yen.
The three were among the top drags on the Nikkei 225.
Denso Corp <6902.T>, one of Toyota's core suppliers, slid 3.6
percent to 2,255 yen and Bridgestone Corp <5108.T>, Japan's
largest tyre maker, skidded 5.4 percent to 1,466 yen.
The New York Times reported on Sunday that the U.S. Treasury
Department was directing GM to lay the groundwork for a
bankruptcy filing should it fail to reach give-back deals with
stakeholders by the deadline set by the Obama administration two
weeks ago. GM shares fell 16 percent on Monday. []
Sumitomo Realty & Development lost 6.9 percent to 1,247 yen
after Goldman Sachs added the stock to its conviction sell list,
saying it looks overpriced.
Shares of Aeon Co Ltd <8267.T> declined 3.9 percent to 743
yen.
Its unit Talbots Inc <TLB.N> posted a deeper-than-expected
quarterly loss and offered staid sales projections, which sent
its shares diving after the closing bell on Monday, overshadowing
news of a new $150 million loan facility that the women's apparel
retailer says will boost liquidity. []
Banking shares erased their earlier gains. Japan's top bank
Mitsubishi UFJ Financial Group <8306.T> fell 0.9 percent to 526
yen and No.2 Mizuho Financial Group <8411.T> dipped 0.5 percent
to 195 yen.
Third-ranked Sumitomo Mitsui Financial Group <8316.T> slipped
1.3 percent to 3,000 yen.
Upbeat preliminary quarterly results from Wells Fargo <WFC.N>
last week had earlier sparked banking sector optimism.
Trade picked up on the Tokyo exchange's first section, with
1.4 billion shares changing hands, compared with last week's
morning average of 1.2 billion.
Declining stocks outnumbered advancing ones by more than 2 to
1.
