PAMELA SAMPSONBANGKOK (AP) â¿¿ Asian stock markets fell Thursday after Spain, the fourth-largest euro economy, was slapped with a two-notch credit downgrade and the U.S. earnings season opened with a whimper. Standard & Poor's downgraded Spain's debt late Wednesday from BBB+ to BBB-, the lowest investment-grade level. S&P said the action was due to the country's recession, high unemployment and social unrest, which limit the government's options for reversing the country's financial crisis. Meanwhile, aluminum giant Alcoa marked the unofficial start to U.S. corporate earnings season by beating earnings estimates â¿¿ but investors were disappointed that the company cut its demand forecast for the year, mostly due to a slowdown in China. In another sign of a worsening global slowdown, South Korea's central bank cut its benchmark interest rate and lowered economic growth forecasts for this year and next. The turbulence from abroad dragged Asian stocks lower. Japan's Nikkei 225 index fell 0.2 percent to 8,579.68. South Korea's Kospi shed 0.2 percent to 1,944.79. Australia's S&P/ASX 200 lost 0.2 percent to 4,483.60. Hong Kong's Hang Seng, however, rose 0.3 percent to 20,979.44. The Philippine benchmark also rose. Spain presented yet another deeply worrying problem. Last month, the European Central Bank agreed to buy unlimited amounts of the government bonds of struggling European countries like Spain to help lower their borrowing costs. But the governments first need to apply for a bailout. Spain has not applied for a bailout. Instead, the government has introduced a series of austerity and labor measures in a bid to bring down its budget deficit and convince investors it can manage its finances without outside help. "The slow progress towards a sovereign bailout for Spain will have likely played a role in the (S&P) decision, a factor that is also weighing on general market sentiment," analysts at Credit Agricole CIB in Hong Kong said in a market commentary. "The debt downgrade may on the margin increase the pressure on the Spanish government to request a formal bailout."