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Asian stocks fell Wednesday, despite US President Barack Obama claiming there were "glimmers of hope" for the world's biggest economy, as fresh data suggested such optimism may be premature.
Obama said the United States was beginning to show signs of moving out of its worst economic crisis in decades but warned there were months of pain ahead.
"There is no doubt that times are still tough," he said in a speech billed as an update to Americans on his recovery strategy.
"By no means are we out of the woods just yet. But from where we stand, for the very first time, we are beginning to see glimmers of hope."
Speaking at Georgetown University Tuesday, he balanced this view with a realistic outlook, saying "2009 will continue to be a difficult year" for the US economy.
However, figures from Washington showed that any movement out of a recession that began in December 2007 could be much further away than many had hoped.
Data released Tuesday showed US retail sales and wholesale inflation unexpectedly fell last month, hinting at a risk of deflation.
And on Wednesday Switzerland's biggest bank UBS said it would slash 8,700 jobs in a bid to "make substantial cost savings" amid fresh losses for the first three months of this year.
The bank, which has been struggling to recover after losing billions in the financial and economic crisis, said its losses for the first quarter reached about two billion francs (1.32 billion euros, 1.75 billion dollars).
Asian markets reflected the gloom, with Tokyo closing 1.13 percent down. Hong Kong was 2.08 percent lower in the afternoon, while Sydney shed 0.14 percent and Seoul 0.71 percent.
They were following Wall Street, which ended down 1.71 percent Tuesday on the back of the US data.
There was more bad news in South Korea, where the government said unemployment hit a three-year high of 4.0 percent in March as companies continue to be hit by the effects of the global financial crisis.
And in Australia an index of economic activity shrunk to its lowest in 27 years in February, suggesting the country is headed for recession.
The Westpac-Melbourne Institute leading index, which indicates the likely pace of economic activity three to nine months into the future, fell to minus 5.1 percent -- the worst since 1982.
Obama's comments were echoed on the same day by Federal Reserve chief Ben Bernanke, who said there were initial signs that the US recession may be easing but warned of the need for financial stability for a full recovery.
He noted "tentative signs that the sharp decline in economic activity may be slowing," citing data on home sales, home building and consumer spending, including sales of new motor vehicles.
Yet the Commerce Department said retail sales dropped a seasonally adjusted 1.1 percent, the sharpest plunge in seven months, after gains in the two previous months, surprising market expectations of a 0.3 percent increase.
A Labor Department report meanwhile showed an unexpected decline in wholesale inflation after two straight months of gains.
The Labor Department said its producer price index (PPI) for finished goods fell a seasonally adjusted 1.2 percent in March, instead of the 0.1 percent rise anticipated.
The PPI fell 3.5 percent year on year, the largest annual decline since January 1950, when the country had a brief bout of deflation. Consumer prices data will be released Wednesday.
Other data showed business inventories fell more than expected in February, by a seasonally adjusted 1.3 percent from January.
There had been slight hopes that the US economy may be nearing a bottoming out following the previous months' good sales figures.
And a forecast-busting earnings report from Wall Street titan Goldman Sachs on Monday and a prediction of record profits by Wells Fargo last week hinted at a turnaround for the ailing banking sector.
Meanwhile Poland's Finance Minister Jan Rostowski on Tuesday said he planned to ask the International Monetary Fund for a 20-billion-dollar credit line to increase the central bank's reserves and "immunise Poland against the virus of the crisis and the attacks of speculators."
