By Masaki Kondo Nov. 6 (Bloomberg) -- Japanese stocks dropped for the first time in three days as worse-than-expected U.S. jobs and services data caused a rally sparked by Barack Obama's presidential election victory to fizzle out. Sony Corp., which gets a quarter of its sales from the U.S., and Canon Inc. sank more than 11 percent. Nippon Steel Corp., the world's No. 2 maker of the alloy, dropped 6.8 percent after rival ArcelorMittal doubled production cuts amid slowing demand. Oil explorer Inpex Corp. slid 11 percent after crude tumbled. Isuzu Motors Ltd. and Orix Corp. fell after slashing profit forecasts. ``We've yet to see the full impact of the financial crisis on the global economy,'' said Naoki Fujiwara, who oversees about $720 million at Shinkin Asset Management Co. in Tokyo. ``U.S. employment has a direct impact on consumer spending, and thus affects earnings for exporters in Japan and throughout Asia.'' The Nikkei 225 Stock Average slumped 622.10, or 6.5 percent, to close at 8,899.14 in Tokyo. The broader Topix index fell 57.61, or 6 percent, to 909.30, with almost seven stocks sliding for each that rose on the gauge. Yesterday, the Nikkei climbed 4.5 percent, extending its rebound to 33 percent from a 26-year low on Oct. 27, as expectations grew that Obama will take additional measures to spur U.S. economic growth. The Topix lost more than a third of its value this year through yesterday, making its constituents' average dividend payouts higher than yields on 10-year government bonds. A global credit crisis, caused by the collapse of the U.S. mortgage market, has erased $1.2 trillion from Japanese equities and weighed on overseas demand for the nation's products. A gauge of service industries in the U.S. contracted the most on record to 44.4 last month, below the 47 estimated by economists, according to the Institute for Supply Management. U.S. companies cut 157,000 jobs in October, the most since November 2002 and more than an estimated drop of 102,000, according to ADP Employer Services. Nikkei futures expiring in December retreated 7.1 percent to 8,840 in Osaka and slumped 7.4 percent to 8,845 in Singapore. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

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