Asian markets higher on hopes of Fed action

By the Associated Press | September 20, 2011 | 10:25 PM EDT

BANGKOK (AP) — Asian stocks made headway early Wednesday as investors fearful of a debt implosion in Europe held onto hopes that the Federal Reserve in would announce measures to jolt the U.S. economy.

Japan's Nikkei 225 index was marginally higher at 8,721.98 after the Finance Ministry released trade data showing the country's exports rose for the first time in six months. South Korea's Kospi index was 0.2 percent higher to 1,841.02. Australia's S&P ASX 200 fell less than 0.1 percent to 4,037.30.

On Wall Street, stocks rose on hopes the U.S. central bank would announce steps to stimulate the economy. Many analysts believe the Fed will announce a new stimulus plan at the end of a two-day policy meeting Wednesday.

The Dow Jones industrial average closed up 7.65 points, or 0.1 percent, at 11,408.66. The Standard & Poor's 500 index fell 0.2 percent to 1,202.09. The Nasdaq composite fell 0.9 percent to 2,590.24.

Meanwhile, debt-saddled Greece moved closer Tuesday to getting the vital bailout funds it needs to avoid a disastrous default on its debts after persuading international debt inspectors to return to Athens and resume reviewing its austerity program. Without the money, the country would default within weeks.

Greece has been depending on rescue loans from other eurozone countries and the IMF since May 2010, when its borrowing costs went through the roof following revelations Athens had been underreporting data on an alarmingly bloated budget deficit and public debt.

Greece is only one of several European countries that investors fear may be at risk of failing to pay their debts. On Monday night, the ratings agency Standard & Poor's cut Italy's credit rating by one notch. Italy has the second-biggest debt burden among countries that use the euro, after Greece.

If Greece or Italy were to default, European banks that have lent money to the countries could lose billions of dollars. That could hurt the European banking system and have repercussions for U.S. banks. Investors are concerned that a default in Europe could cause a lending crisis similar to what happened after the collapse of Lehman Brothers in 2008.