HONG KONG: Asian stocks slumped to a two-week low in early trading Monday, extending a weak start to 2008, while the dollar hovered near multi-week lows after weak U.S. jobs data heightened fears of recession in the regions top export market.

Bond prices rallied on expectations that the Federal Reserve will cut interest rates later this month to try to revive growth, while oil prices - which hit a record above $100 barrel just last week - fell as investors feared demand would suffer from a U.S.-led slowdown in global economic growth.

The MSCI Asia Pacific index of stocks excluding Japan lost 2.2 percent Monday morning. The index has dropped more than 3 percent this year, weighed down by concerns about the worlds top economy.

“The sluggish jobs data is reinforcing concerns that the subprime mortgage crisis is pushing the U.S. economy towards a recession,” said Kim Young-gak, an analyst at Hyundai Securities.

“Now it looks like the U.S. Federal Reserve will almost certainly cut interest rates by at least a quarter percentage point this month.”

Tokyo shares dropped 1 percent after slumping 4 percent on Friday, their first trading day of the year.

Taiwan stocks fell 3 percent, while other markets such as Australia, Hong Kong and Singapore were down more than 2 percent.

Exporters were hit hard, particularly chip makers following downgrades of the sector by a couple of U.S. brokerages last week.

Microchip equipment maker Tokyo Electron fell 3 percent, while chipmaker Samsung Electronics of South Korea, was down 3.3 percent. Taiwans TSMC, the worlds biggest contract chipmaker, dropped 6.3 percent

The U.S. non-farm payrolls figures showed U.S. job growth skidded to a near-halt in December and unemployment rose to a two-year high.

The dollar weakened on Friday, undermining the earnings prospects for Asias exporters. The currency steadied in Asia on Monday, having hit a six-week low of 107.90 on Friday and it stayed near a five-week low against the euro.

Commodity-related shares, such as BHP Billiton, which had benefited last year from soaring prices in metals and oil, also fell on concerns about a slowdown in global demand growth.

U.S. crude futures retreated 59 cents to $97.32 a barrel, while London Brent crude eased to $96.24

“Concerns about the U.S. economy are clearly putting some pressure on oil prices. Some market players are also using this opportunity to take profits,” said Gerard Burg, a resource analyst from the National Bank of Australia.

With fears of a U.S. recession growing, investors continued a trend this year of switching to so-called safe-haven assets, such as government bonds. Japanese government March bond futures hit a one-month high on Monday.

U.S. short-term interest rate futures jumped on Friday, pricing in as much as a 70 percent chance that the Fed will cut rates by 50 basis points when it meets to review policy on Jan 29-30.

The Fed has lowered its benchmark lending rate by 100 basis points since September to 4.25 percent.

Spot gold edged down to $857.10 from $857.90 as energy prices fell, but stayed within reach of a record high of $869.05 traded last week, as a weak dollar makes the precious metal cheaper in other currencies.

(02-11) 07:58 PST NEW YORK, (AP) —

Long-term Treasury prices rose Monday after news of problems at American International Group Inc. again raised concerns about risky low-quality debt.

The insurer said it will make more information public about the methods it used to value the complicated debt pools known as collateralized debt obligations, or CDOs. These assets are a major concern to investors because CDOs contain some subprime debt instruments that are likely to default and it is widely suspected their current prices do not reflect that liability.

AIG also said it had been told there was some weakness in its internal controls at the end of 2007.

Worries about subprime mortgages and other poor-quality debt have fueled a string of vigorous rallys for Treasurys since last August, as risk-averse investors have opted for the safety of government-backed bonds.

“The AIG news that is coming out is impacting the market,” said Tom di Galoma, head of Treasurys trading at Jefferies & Co. “There is fear in the market that there will be more negative headlines on this.”

The benchmark 10-year Treasury note gained 16/32 to 99 8/32 with a yield of 3.59 percent, down from 3.65 percent late Friday.

The 30-year long bond gained 29/32 to 100 5/32 with a yield of 4.36 percent, down from 4.43 percent. The 2-year note rose 2/32 to 100 14/32 with a yield of 1.89 percent, down from 1.93 percent.

The subprime crisis was also discussed at length over the weekend at a meeting of the Group of Seven finance ministers in Tokyo. After the global economic summit, German Finance Minister Peer Steinbruck said the group fears that losses on securities due to subprime exposure in time will total $400 billion.

The finance chiefs also expressed concern that it is still unknown where much of the subprime pain will emerge, as collateralized debt obligations were sold to institutional and government investors around the world.

And subprime debt is not the only risky asset class that investors are worried about. In recent sessions there also have been concerns about a possible wave of defaults on the low-rated corporate loans that were used to finance a leveraged buyout boom in 2006 and 2007.

Investors suspect that banks will try to sell off these leveraged loans at bargain rates to get them off their books soon.

(02-11) 08:25 PST Pawtucket, R.I. (AP) —

The toymaker Hasbro Inc. says Chief Executive Alfred J. Verrecchia will step down as CEO and be replaced by Chief Operating Officer Brian Goldner.

The world’s second biggest toy company said Monday that 64-year-old Verrecchia will become chairman of the board. The 44-year-old Goldner will succeed him as CEO on May 22.

Verrecchia has spent 43 years at Hasbro. He took over as president and chief executive in 2003, succeeding Alan Hassenfeld, a member of Hasbro’s founding family. Verrecchia oversaw a turnaround at the once-troubled toymaker.

Hassenfeld is the current board chairman.

Goldner joined Hasbro in 2000 from Bandai America Inc.