Wall Street went into retreat overnight as talk of the Federal Reserve tapering, Government budget negotiations and profit-taking weighed on trade.
The market is starting to think about a new round of budget negotiations in Washington, with the next Government shutdown pencilled in for January 15, unless a deal is reached in the interim.
The Dow Jones closed down 0.3 per cent at 15,973 points.
The S&P 500 came off yesterday’s record high and lost 0.3 per cent to close at 1,802.
Overnight, a landmark rule was passed by US authorities to curb risky behaviour by banks.
The Volcker rule, which is named after former Fed Chairman Paul Volcker, who championed the reform, effectively bans banks from speculative trading for their own profits.
This practice was one of the triggers which led to the collapse of several US banks in the GFC.
And as hundreds of Australian workers wait for news on the future of Holden, there has been a big change at the top of its parent company GM.
Chief executive Dan Akerson will step down next month and be replaced by global product development chief Mary Barra.
Ms Barra will be the first woman to run a US carmaker and is reported in US media as being known for cutting costs and bureaucracy at the company.
Only this week the US Government sold its remaining shares in GM, signalling the end of the bailout that’s cost US taxpayers around $US10 billion.
In Europe, markets all went into retreat as they got their first chance to react to speeches by US Federal Reserve officials yesterday, which called for stimulus to end.
London’s FTSE 100 lost 0.6 per cent to close at 6,523 points.
The Euro STOXX 50 closed down 0.9 per cent at 2,961.
The Australian dollar picked up around half a cent overnight, and was worth 91.54 US cents at 8:50am (AEDT).
West Texas crude rose to $US98.25 a barrel, while Singapore’s Tapis crude price trimmed back to $US114.90.
The spot gold price jumped overnight to $US1,260.85 an ounce.