Asian stock markets down as US earnings disappoint, Fed meeting eyed

Asian stock markets dropped Wednesday after U.S. earnings fell short of expectations and investors began to focus on next week's Federal Reserve meeting.

KEEPING SCORE: Japan's Nikkei 225 fell 1 percent to 20,628.20 and South Korea's Kospi lost 1 percent to 2,063.31. Hong Kong's Hang Seng slipped 1.2 percent to 25,234.18. Australia's S&P/ASX 200 dropped 1.1 percent to 5,641.50. Stocks in Taiwan and Southeast Asia were also lower.

FEDERAL RESERVE: After Federal Reserve chief Janet Yellen recently reiterated U.S. interest rates are likely to rise this year, investors are looking to next week's policy meeting for clues about the probable timing. Interest rates in the U.S., along with other major economies, have been at record lows since the 2008 financial crisis, which has been a boon for stock markets.

ANALYST'S TAKE: "With Greece and China slipping off the table, investors are turning their attention to the U.S. where the earnings season is underway," said Bernard Aw, a market strategist at IG, in a commentary. "Moreover, traders are positioning for the FOMC next week," he said referring to the U.S. Federal Reserve's two-day policy meeting next week.

WALL STREET: Disappointing earnings from some big U.S. companies pulled stocks lower on Wall Street on Tuesday. The Dow Jones industrial average dropped 1 percent to 17,919.29. The S&P 500 index lost 0.4 percent to 2,119.21. The Nasdaq composite skidded 0.2 percent to 5,208.12.

EARNINGS: United Technologies reported earnings that didn't meet forecasts. The aerospace company also cut its outlook for 2015, citing weaker sales in Europe and China's slowing economy. Apple fell in after-hours trading after it reported strong iPhone sales but revealed little about how sales of its new smartwatch were doing. The company also issued a forecast for the current quarter that suggested revenue could fall below estimates. Microsoft booked an $8.4 billion expense to write off the Nokia phone business it bought a year ago.

ENERGY: Benchmark U.S. crude slipped 69 cents to $50.17 a barrel in electronic trading on the New York Mercantile Exchange The contract rose 21 cents to close at $50.36 a barrel in New York on Tuesday. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 47 cents at $56.57 a barrel in London.

CURRENCIES: The euro strengthened to $1.0941 from $1.0937 in the previous trading session. The dollar weakened to 123.68 yen from 123.87 yen.