(AP) MOSCOW - Stocks in Europe and Asia were mixed on Thursday as markets worried that their hopes of Federal Reserve action to stimulate the U.S. economy might not be met.
The Fed wraps up a two-day policy meeting Thursday, and most investors hope that it will choose to jumpstart the world's largest economy and reduce high unemployment by embarking on a further round of quantitative easing.
"There is risk of disappointment in case the Fed surprises by not easing policy as much as the market expects," said Stan Shamu of IG Markets in Melbourne, Australia.
Most European stocks fell in late morning trading. Germany's DAX lost 0.3 percent to 7,323.39 points while France's CAC-40 was 0.5 percent down at 3,524.66. Britain's FTSE 100, however, added 0.03 percent to 5,783.61.
European stocks got a big boost on Wednesday after Germany's highest court rejected calls to block the creation of Europe's 500 billion euro ($640 billion) rescue fund for indebted governments. Meanwhile, a parliamentary election in the Netherlands showed strong support for current prime minister Mark Rutte and his pro-euro polices. The euro climbed 0.5 percent on the day to $1.2920, the first time it's been above the $1.29 threshold since May.
The creation of the European Stability Mechanism rescue fund for indebted governments could be crucial in containing the European debt crisis that threatens the world economy, and so is participation of Germany, the eurozone's economic powerhouse.
But the rally seemed to be short-lived as analysts said that the European rescue fund would still be inadequate in case of a deepening crisis in Spain and Italy.
"In the event of a Spanish and Italian bailout, even with ESM ratification, the resources available fall short of what is required for such bailouts," Neil MacKinnon, global macro strategist at VTB Capital, said in an emailed note.
Italy's Central Bank on Thursday easily raised 4 billion euro ($5.16 billion) at an auction of three-year notes with demand at 1.49 times the offer.
The biggest step that investors hope the Fed would be a third round of bond purchases. In two previous bond-buying programs, the Fed bought more than $2 trillion of Treasurys and mortgage-backed securities after the 2008 financial crisis.
Tom Kaan, head of equity sales at Louis Capital Markets in Hong Kong, said that while Fed Chairman Ben Bernanke strongly hinted last month that action would be taken, the real question was how big any steps might be.
"I think he doesn't have much choice," Kaan said. "The extent is what the markets are looking for. The size of it."
Wall Street appeared set for a lower open, with Dow Jones industrial futures slipping 0.2 percent to 13,338. S&P 500 futures also were down, by 0.2 percent to 1,436.30.
Asian stock markets turned in a mixed performance.
Japan's Nikkei 225 index closed up 0.4 percent at 8,995.15 after earlier surpassing 9,000 for the first time since Aug. 30. South Korea's Kospi rose marginally to 1,950.69. Hong Kong's Hang Seng lost 0.1 percent 63. Australia's S&P/ASX 200 fell 0.5 percent.
Many analysts feel there is reason for optimism about the global economic outlook. The European Central Bank and the government of China are among authorities that have all announced steps to handle various economic crises or boost sluggish growth.
But Marc Oswald, a strategist at London-based Monument Securities, warned in a note on Thursday that the ECB's and Fed's focus on the helping out banks may not be the right solution to tackle the crisis as "there may be structural weaknesses in the economy, as yet undiagnosed, that are keeping demand depressed."
"Though they may now believe that the problem they face is that of encouraging the banks to resume their role in financial intermediation, they might still be disappointed by the performance of their economies even if they could repair the banking system," Oswald said.
Benchmark oil added 21 cents to $97.22 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents to end at $97.01 per barrel on the Nymex on Wednesday.
In currencies, the euro rose to $1.2916 from $1.2894. The dollar fell to 77.69 yen from 77.87 yen.