The Australian dollar rose back above 80 US cents and Wall Street lost ground after US growth figures fell short of expectations.
The Dow Jones Industrial Average closed 0.4 per cent lower at 18,036.
The S&P 500 matched that fall, closing at 2,107.
Overnight, official figures revealed US economic growth slowed to 0.2 per cent in the March quarter, which was well short of expectations of 1 per cent growth.
The figure is almost stagnant compared to the 2.2 per cent growth achieved in the previous quarter.
Consumption rose 1.9 per cent, but dragging on growth was a 3.4 per cent drop in business investment and exports declined a very sharp 7.2 per cent.
Dock worker strikes at key west coast ports and the renewed strength in the US dollar both hurt exports.
Plunging energy prices over the period hurt business investment, with lower oil prices curbing enthusiasm to invest in the sector.
Also out overnight was the US Federal Reserve's latest rates decision and commentary on the economy.
Rates were left at record lows surprising no one, but the bank continues to indicate that it will raise them soon, although its in no rush.
It noted the slump in growth figures, but did not seem too alarmed.
"Information ... suggests that economic growth slowed during the winter months, in part reflecting transitory factors. The pace of job gains moderated, and the unemployment rate remained steady," the statement from the Federal Open Market Committee read.
The statement noted a decline in household spending but that incomes are rising, and consumer sentiment remains high.
It gave further detail on the timing of the much-anticipated rate rise.
"The committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the committee views as normal in the longer run," the statement continued.
Across the Atlantic markets ended down, hit by the slowing growth figures in the US and concerns over Europe's debt negotiations with Greece.
London's FTSE 100 retreated 1.2 per cent while the Eurostoxx dropped 2.2 per cent.
Australian stocks were set for a bad start to trade; at 8:30am (AEST) the SPI 200 was 0.8 per cent lower at 5,787.
The Australian dollar benefitted from an easing in the value of the greenback, and was worth 79.94 US cents.
The key spot iron ore price fell back from yesterday's rise to $US59.20 a tonne, and closed at $US56.90.
The gold price saw little movement and closed at $US1,2104.30 an ounce.
Oil prices continue to see choppy trade, West Texas was at $US58.50 a barrel.
source: http://www.abc.net.au