By Aiko Hayashi TOKYO, Nov 11 (Reuters) - The Nikkei average slid 3 percent on Tuesday, as exporters like camera maker Canon (7751.T: Quote, Profile, Research, Stock Buzz) tumbled after a batch of grim news about U.S. corporate giants fuelled fears of a protracted global recession. Chemicals firm Mitsubishi Rayon Co (3404.T: Quote, Profile, Research, Stock Buzz) slid 10 percent after saying it was looking at acquiring unlisted British chemicals producer Lucite International, a deal it confirmed after the close. [ID:nT46372] But JFE Steel Corp (5411.T: Quote, Profile, Research, Stock Buzz), the world's third-biggest steelmaker, outperformed rivals after it said it may cancel or suspend two projects to build steel mills in Brazil and Vietnam. [ID:nTKF003140] Trade was volatile, with the benchmark paring early losses to be almost flat at one stage, helped by a softening yen and gains in the U.S. stock futures SPc1, which later reversed course. "We're seeing a tug of war between negative news coming out of manufacturers such as GM and the financial crisis taking a breather, with investors waiting for steps to be unveiled by President-elect Barack Obama," said Takahiko Murai, general manager of equities at Nozomi Securities. Corporate news out of the United States was bleak. Deutsche Bank lowered its equity value on General Motors (GM.N: Quote, Profile, Research, Stock Buzz) to zero, sending its shares to 62-year lows, and analysts warned that Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) could post a quarterly loss for the first time in its history. [.N] The bankruptcy filing by Circuit City Stores Inc (CC.N: Quote, Profile, Research, Stock Buzz), the No. 2 U.S. consumer electronics retailer, also underlined growing U.S. consumer spending cutbacks. In light trade, the benchmark Nikkei .N225 ended down 272.13 points at 8,809.30, after falling more than 4 percent earlier. The broader Topix .TOPX declined 3 percent to 889.36. Some market players said investors were already growing nervous about the global financial summit of Group of 20 leaders in Washington on Friday and Saturday. "There's talk that it will be extremely difficult to bring the different groups together to agree about anything, and this is scaring off investors," said Tomomi Yamashita, a fund manager at Shinkin Asset Management. But some also said that the stock market had also found some support from a New York Times report that Obama asked President George W. Bush on Monday to back immediate emergency aid for the U.S. auto industry. [ID:nN10476130] EXPORTERS HIT Against the yen, the dollar was unchanged at 98.02 yen after retreating to 97.49 yen. Canon slid 8.4 percent to 3,150 yen, becoming the largest drag on the Nikkei 225, while Advantest Corp (6857.T: Quote, Profile, Research, Stock Buzz), the world's No.1 maker of chip testers, lost 4.6 percent to 1,315 yen. Toyota Motor (7203.T: Quote, Profile, Research, Stock Buzz) shed 4.9 percent to 3,300 yen and Honda Motor (7267.T: Quote, Profile, Research, Stock Buzz) declined 5.3 percent to 2,240 yen. Mitsubishi Rayon tumbled 10.2 percent to 220 yen. "The deal is short-term negative but mid- and long-term positive for the company," said Credit Suisse analyst Masami Sawato before the official announcement. JFE Holdings ended 2.4 percent lower at 2,620 yen but outperformed a 5.6 percent slide for rival Nippon Steel Corp (5401.T: Quote, Profile, Research, Stock Buzz) after it said it may cancel or suspend two plans for mills in Brazil and Vietnam, worth $5-6 billion each, if demand remains weak. Citizen Holdings Co (7762.T: Quote, Profile, Research, Stock Buzz) tumbled 9.5 percent to 504 yen after the watch maker slashed its annual operating profit forecast by 27 percent due to slumping consumer spending and slowing corporate investment in industrial machinery. Among shares that rose, Shionogi (4507.T: Quote, Profile, Research, Stock Buzz) extended gains to 2,105 yen, making for a 13.6 percent advance over two days after AstraZeneca (AZN.L: Quote, Profile, Research, Stock Buzz) outflanked rivals with impressive clinical trial results for its cholesterol drug Crestor. The Japanese drugmaker originally discovered Crestor and receives royalties on sales. [ID:nLA371115] Some 2.1 billion shares changed hands on the Tokyo Stock Exchange's first section, compared with last week's daily average of 2.6 billion. Declining stocks outnumbered advancing ones by more than 3 to 1. (Reporting by Aiko Hayashi; Editing by Edwina Gibbs)

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