Asian markets down after weak US earnings

A batch of weaker-than-expected earnings that interrupted a two-week rally on Wall Street also sent stocks lower in Asia on Wednesday.

Oil prices fell to near $110 a barrel as a report showed U.S. crude supplies rose more than expected last week, suggesting growth in demand could be waning. In currencies, the dollar was higher against the euro and the yen.

Sentiment for riskier assets also was muted as investors fretted about potential terrorist attacks following the killing of Osama bin Laden at the hands of U.S. commandoes over the weekend.

"The market welcomes the good news, but it worries about whether this news will lead to higher short term uncertainties on the concern of revenge activities," Bank of America Merrill Lynch said in a report.

Enthusiasm for stocks was also dampened by a report Tuesday by the People's Bank of China that reflected continuing concerns over inflation. Such concerns could spur the central bank to place additional curbs on lending, which would reduce the amount of money available for investment in the hopes of stabilizing prices.

Hong Kong's Hang Seng index dropped 1 percent to 23,407.95. Among biggest losers was blue chip property company China Overseas Land & Investment Ltd., which drooped 3 percent.

Energy shares also slumped as the price of oil slipped. Shares of Chinese oil producer CNOOC Ltd. were down 2.5 percent; Sinopec, also known as China Petroleum and Chemical Corp., was down 2 percent.

South Korea's Kospi was 1 percent lower to 2,180.04. Indexes in Singapore, Taiwan, Malaysia and mainland China also posted losses. New Zealand's benchmark was up, and markets in Japan were closed for a holiday.

Australia's S&P/ASX 200 was off 1 percent at 4,739.60. Westpac Banking Corp., one of Australia's largest lenders, said Wednesday that its first-half profit rose 38 percent, in line with expectations, as bad debt charges fell. But analysts were undecided as to whether the result would boost Aussie banking shares.

Westpac shares slid 2.8 percent as the bank noted that consumer sentiment was expected to remain cautious. National Australia Bank Ltd. lost 1.9 percent, ANZ Banking Group Ltd. was down 1.5 percent and Commonwealth Bank of Australia slid 1.3 percent.

On Wall Street on Tuesday, the earnings rally that had lifted the stock market over the past two weeks paused after a batch of weaker-than-expected results.

Pfizer, the world's largest drug maker, posted lower-than-expected quarterly results. Clorox, Molson Coors Brewing Co., and Beazer Homes also declined after announcing weaker earnings.

The Dow Jones industrial average gained less than a point to close at 12,807.51. The S&P 500 index fell 4.60 points to 1,356.62. The Nasdaq composite fell 22.46 points to 2,841.62.

Benchmark crude for June delivery was down 26 cents at $110.79 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.47 to settle at $111.05 on Tuesday.

In currencies, the euro weakened to $1.4801 from $1.4821 late Tuesday in New York. The dollar was slightly higher to 80.93 yen from 80.91 yen.

The dollar has fallen over the past few weeks as investors expected the Federal Reserve would keep interest rates low while central banks overseas are raising interest rates. Higher rates tend to make currencies more attractive to investors seeking higher yields.