HONG KONG (Bloomberg) -- Asian stocks fell for a third day, the longest losing streak in two months, on concern losses at a Bear Stearns Cos. hedge fund will prompt investors to favor government bonds over equities.

Canon Inc., the world's largest maker of digital cameras, and Nintendo Co. paced the drop. Taiwan Semiconductor Manufacturing Co. led technology stocks lower after results from Intel Corp., the world's biggest chipmaker, raised speculation profitability will decline. “Much of the concern is that investors will get scared, lock in their gains and put their money under their pillows,” said Jason Chong, who helps manage the equivalent of $600 million at UOB-OSK Management Sdn. in Kuala Lumpur. BHP Billiton Ltd. led a slide among mining companies after copper prices fell. South Korea's POSCO slid as some investors shrugged off its highest quarterly profit in two years and took advantage of the stock's 25 percent gain this month to sell. The Morgan Stanley Capital International Asia-Pacific Index lost 1 percent to 157.54 at 7:12 p.m. in Tokyo, taking its three-day drop to 1.2 percent, the longest slide since the four days to May 18. Japan's Nikkei 225 Stock Average declined 1.1 percent. All Asian markets fell except China, India, and the Philippines. South Korea's KOSPI index, which resumed trading after a one-day holiday, slipped 1 percent. Korea Exchange Bank advanced after a U.K. newspaper reported Tuesday that HSBC Holdings Plc is interested in buying the lender. --------------------- Bond yields drop Most U.S. stocks fell Tuesday as a drop in crude prices sent oil producers such as Exxon Mobil Corp. lower. Standard & Poor's 500 Index futures dropped 0.7 percent Wednesday after results from Intel and Yahoo! Inc., owner of the most-visited U.S. website, spurred concern that profit forecasts for technology companies are too high. Canon dropped 1.8 percent to 7,010 yen. Nintendo, the world's third-biggest maker of video-game players, slid 2.8 percent to 47,800 yen. Bear Stearns bailed out one of its hedge funds last month with $1.6 billion in emergency financing. The firm Tuesday told investors in that fund that they won't get any money back after creditors forced it to sell assets at depressed prices. Yields on 10-year U.S. Treasury notes fell to the lowest in a week on speculation investors will seek assets with less risk than equities. The yield on Japan's benchmark 10-year bond dropped 2 basis points to 1.905 percent as of 2:05 p.m. in Tokyo. ----------------------- Stronger yen Japanese exporters such as Canon and Nintendo also fell on concern a stronger domestic currency will lower the value of overseas revenue. The yen was trading at 121.76 per dollar at the close of Japanese stocks trading, from 122.34 late in New York Tuesday. Japan's currency traded at 168.21 per euro from 168.59. Taiwan Semiconductor, the world's largest maker of customized chips, lost 2.3 percent to NT$71. United Microelectronics Corp., Taiwan Semiconductor's biggest rival, fell 0.8 percent to NT$19.85. Tokyo Electron Ltd., the world's second-biggest supplier of chipmaking equipment, dropped 1 percent to 8,930 yen. ------------------------ Falling product prices A share-price target for United Microelectronics was cut by 3.2 percent at UBS AG. Tokyo Electron was reduced to “hold” from “buy” at Nikko Citigroup Ltd. Meanwhile, a measure of materials producers on MSCI's Asian benchmark slid 1.2 percent, the third-biggest decline among its 10 industry groups. Copper futures in New York slipped 0.3 Tuesday to the lowest since July 3. Melbourne-based BHP Billiton, the world's largest mining company, fell 2 percent to A$37.43. Jiangxi Copper Co., China's second-biggest producer of the metal, declined 2 percent to HK$14.82 in Hong Kong. Nippon Mining Holdings Inc., Japan's biggest copper smelter, lost 0.6 percent to 1,246 yen. --------------------------- POSCO profit POSCO, Asia's biggest steelmaker by market value, fell 5.4 percent to 525,000 won. The stock had risen 25 percent this month before Wednesday. Its 14-day relative strength index, a moving average based on whether the shares rose or fell, ended at 79 on July 16. A level of 70 indicates to some investors that the shares are poised to slide. The company said on July 16 that second-quarter profit climbed 55 percent to 1.11 trillion won (1.2 billion dollars) as it raised prices on higher demand from carmakers and shipbuilders. Analysts in a Bloomberg News survey expected 938 billion won. Korea Exchange, the South Korean bank controlled by Lone Star Funds, advanced 4.4 percent to 14,400 won. HSBC is in early talks with Lone Star about a takeover of the lender for more than 2.5 billion pounds (5 billion dollars), the Daily Telegraph reported Tuesday. -------------------------- Japanese earthquake An earthquake in northwest Japan on June 16 killed at least nine people and damaged property. Riken has yet to decide when it will reopen its factories, the Nikkei newspaper said. Its shares fell 1.4 percent to 616 yen, after Tuesday's 4.1 percent drop. Tokyo Electric Power Co., Asia's biggest power producer, tumbled 4 percent to 3,600 yen. The earthquake caused 50 malfunctions at the company's nuclear plant in Kashiwazaki-Kariwa, Kyodo News reported Tuesday. Authorities have ordered the company to keep the facility closed