BANGKOK (AP) -- Asian stock markets fell Wednesday after a weaker U.S. consumer confidence reading shook hopes for a healthy rebound in the world's No. 1 economy.
Benchmark oil fell below $106 per barrel while the dollar rose against the euro but fell against the yen.
Losses in Asia followed Wall Street, where stocks pulled back after the Conference Board said its index of U.S. consumer confidence slipped in March. The mood was further dampened when the Federal Reserve Bank of Richmond, Virginia reported that a measure of regional manufacturing plunged this month.
Signs of an improvement in the U.S. economy emerged in recent weeks but the most recent indicators have been lackluster. Data released Tuesday in Washington showed home prices fell in January for a fifth straight month in most major U.S. cities, as modest sales increases have yet to boost prices.
On top of that, Federal Reserve chairman Ben Bernanke said the U.S. job market was still weak despite recent signs of improvement.
Hardest hit in Asia was China where investors worried that weak U.S. consumer demand could add to the contraction already being experienced by Chinese manufacturers. The Shanghai Composite Index tumbled 1.5 percent to 2,311.90 and the smaller Shenzhen Composite Index slid 2.7 percent to 922.82.
"All manufacturing in China is suffering from a margin squeeze. Exports are slowing down. The cost of business, oil prices and labor costs are increasing. Business is not that great," said Derek Cheung, chief investment officer at Neutron Partners INV Ltd. in Hong Kong.
Elsewhere in Asia, Japan's Nikkei 225 index dropped 0.8 percent to 10,170.20, a day after the benchmark shot to a one-year high.
Hong Kong's Hang Seng ceded 1 percent to 20,837.97 and South Korea's Kospi shed 0.6 percent to 2,028.78. Australia's S&P/ASX 200 bucked the trend, rising 0.9 percent to 4,337.80.
Analysts said some Japanese stocks were pulled lower by ex-dividend selling. Some investors had bought stocks because they were due to pay dividends and were now selling once the entitlement date to receive the dividend had past.
"Japan's index has been well supported by a weaker yen over the past few months and has outperformed the region. However, today the index was dented by over 200 Japanese stocks going ex-dividend," said Stan Shamu, market analyst at IG Markets in Melbourne.
Taiwan electronics manufacturer Hon Hai Precision Industry Co. rose 4.6 percent after announcing it is taking a 10 percent stake in Japan's struggling Sharp Corp.
Later Wednesday, the U.S. government will release data on durable goods orders for February. Durable goods are products expected to last at least three years, such as appliances, cars, machinery and airplanes.
"Along with the further drop in home prices, today's durable goods report should underscore what Bernanke said on Monday: that growth is not strong and further drops in the unemployment rate are unlikely until growth picks up," analysts at DBS Bank Ltd. in Singapore said in a research note.
The Dow Jones industrial average dropped 43.90 points, or 0.3 percent, to close at 13,197.73. The Standard & Poor's 500 index fell 3.99 points, or 0.3 percent, to 1,412.52. The Nasdaq composite fell 2.22 points, or 0.07 percent, to 3,120.35.
Benchmark oil was down 51 cents to $106.82 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 30 cents to $107.33 per barrel on the Nymex on Tuesday.
In currency trading, the euro fell to $1.3326 from $1.3336 late Tuesday in New York. The dollar fell to 82.86 yen from 83.09 yen.