Asian markets inch up; Wall Street ends lower

Asian shares inched higher in early trade on Wednesday, while the yen may head lower as some investors said the position unwinding due to risk aversion would be shortlived.

Crude oil slipped, extending two days of losses after Goldman Sachs urged investors to book profits, warning for a second time in as many days of an increased risk of price reversal .

Tokyo's Nikkei rose 0.4 percent while South Korea's Kospi edged up 0.2 percent, led by exporters, although resource-related stocks weakened across Asia , taking a cue from the widespread decline in commodity prices overnight.

The yen slipped 0.4 percent against the dollar as some analysts said its gains this week were because of stretched positioning and may be an opportunity to extend their short positions.

Brent crude for May was down 0.1 percent at $120.77 a barrel, extending a $3 plunge overnight. The May Brent contract expires on Thursday. U.S. May crude fell 0.1 percent to $106.12.

US stocks dropped on on worries falling oil prices could set off a reversal in the high-flying energy sector, while Alcoa's leaner-than-expected revenue disappointed.

Energy stocks led the S&P 500's losses, with the S&P Energy Index down 3 percent. Strategists were already worried the rally in energy stocks may have gone too far ahead of earnings, and a drop in oil prices could spark an extended sell-off.

Signalling the start of the US first-quarter earnings period, Alcoa Inc late Monday reported revenue that missed forecasts. Its profit, however, topped consensus expectations. Alcoa's stock slid 6 percent to $16.70 and was the Dow's biggest percentage loser of the day.

Materials stocks in general fell in sync with declines in metals prices. Investors are worried that Japan's massive earthquake and a nuclear crisis could weaken recovery prospects in the world's third-largest economy.

The SPDR S&P Metals and Mining ETF fell 2.2 percent. The Dow Jones industrial average was down 117.53 points, or 0.95 percent, at 12,263.58. The Standard & Poor's 500 Indexwas down 10.30 points, or 0.78 percent, at 1,314.16. The Nasdaq Composite Index was down 26.72 points, or 0.96 percent, at 2,744.79.

The S&P Materials Index fell 1.4 percent while U.S.-traded shares of Rio Tinto fell 2.3 percent to $72.13. Freeport-McMoRan Copper & Gold Inc shed 3.1 percent to $53.70.

The day's slide broke some technical barriers, analysts said.

The S&P 500 fell below support at 1,320, and touched the rising 20-day moving average at about 1,310, according to Larry McMillan, president of McMillan Analysis Corp. in Morristown, New Jersey.

Composite volume was below average on the NYSE, Amex and Nasdaq, with 7.53 billion shares changing hands, compared with last year's daily average of 8.47 billion.

Declining stocks outnumbered advancing ones on the NYSE by about 11 to 4 and on the Nasdaq by about 10 to 3.