Wall Street continued its slide overnight as economic data failed to meet expectations.

The local share market was set to turn around yesterday’s gains; at 8:00am (AEST) the SPI 200 was 0.6 per cent lower at 5,251.

The Australian dollar has recovered slightly and was trading at 87.46 US cents.

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The Dow Jones added to yesterday’s losses, retreating 0.2 per cent to 1,743, and the S&P 500 lost 0.3 per cent to 1,972.

The sharp rise seen on the volatility index over the past week eased, the VIX rose just 2 per cent overnight.

Data painted a less rosy picture of the US economy than markets are used to.

US house prices, as measured by the S&P Case Shiller20 city index, fell 0.5 per cent in July, taking the annual rate back down to 6.8 per cent, which is the slowest pace of growth for two years.

Westpac’s James Shugg suggests this may have been caused by a tightening up of loan rules.

“The lack of first time buyers – many finding it harder to meet credit requirements due to defaults on auto or student loans – is being compounded by less investor interest in the market,” he observed.

The key measure of consumer confidence by the Conference Board fell sharply from 93.4 to 86 last month, reversing all of July and August’s gains, and some of June’s.

A key manufacturing gauge – the Chicago PMI – eased from 64.3 to 60.5 in September.

Also weighing on the Dow was a fall in energy stocks as oil prices continue to slide.

Across the Atlantic, the FTSE 100 finished 0.4 per cent lower, but the Eurostoxx 600 gained 1 per cent capping European stocks’ longest quarterly rally since 2006.

The rise in Europe was down to markets betting that the European Central Bank will continue to pump money into the region after official figures revealed eurozone core inflation printed lower than expected at 0.7 per cent year-on-year and German unemployment was higher than expected.

Locally, the iron ore price continued to slide overnight, it lost 20 cents a tonne to close at $US77.50 a tonne.

Spot gold eased overnight and closed at $US1,208.74 an ounce.

Oil prices also eased: West Texas crude closed at $US91.12 a barrel and the Tapis crude price was at $US98.16.