Asian stocks post modest gains after Fed meeting September 22 2010

Asian stock markets posted modest gains in holiday-thinned trade Wednesday after the Federal Reserve expressed concern about the flailing U.S. economy and indicated it was ready to do more to help.

Oil prices hovered near $75 a barrel after a report showed U.S. supplies unexpectedly rose last week, a sign demand for crude may not be improving. The dollar weakened against both the euro and the yen.

The U.S. central bank said Tuesday it is concerned that inflation is below levels consistent with a healthy economy and indicated that it is ready to provide "additional accommodation" to support the recovery. That would mean more purchases of Treasurys or other kinds of debt, which would keep interest rates low and hopefully encourage borrowing.

But the impact of the Feds statement on Wall Street was short-lived. While the Dow ended slightly up, the Standard & Poors 500 index and the Nasdaq fell. Analysts said that some investors were losing faith in the ability of the Fed to revive the worlds No. 1 economy.

"The economy is still stuck in neutral and hardly growing at all. America is still looking for a magic formula to revive the economy, but the No. 1 problem is that America is too deeply in debt," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.

Some markets in Asia, though, had prospects for a brighter month. Chinas traditional September shopping spree helped lift Hong Kongs Hang Seng Index, which has rebounded nearly 8 percent so far in September after a melancholy August. The index was up 167.34 points, or 0.8 percent, to 22,169.93.