Australian stocks are marginally lower at lunchtime in the East, following a negative offshore lead and lack of market moving economic data. The All Ordinaries Index (XAO) is lower by 7.2pts or 0.2pct to 4667.5.

Financial and retail stocks are among the biggest drags, with shares in the Commonwealth Bank (CBA) down 0.6pct to $52.17. David Jones (DJS) shares are dragging on the consumer discretionary sector, following a broker downgrade in the wake of the retailer's FY result. DJS shares are down 1.6pct at lunchtime to $5.02.

Index leader BHP Billiton (BHP) has added 0.5pct to $39.10 in response to firmer metals trade and speculation a Chinese conglomerate is making an alternative takeover bid for Canada's Potash Corporation.

The price of gold hit a record high overnight of US$1292.10 an ounce. Shares in Australia's largest listed gold producer Newcrest Mining (NCM) are slightly weaker at $40.50.

The Australian Competition and Consumer Commission (ACCC) has today granted preliminary approval for Virgin Blue Australia (VBA) to tie up with Middle Eastern airline Etihad. The airlines will co-operate on pricing and scheduling and will start selling Australia to Abu Dhabi airfares from October 1. VBA shares are up 2.2pct to $0.45 while Qantas (QAN) has slipped 1.1pct to $2.64.

The Australian dollar remains firm against all the major currencies and is currently buying US95.68c, £0.6109 and €71.39c.

US mortgage applications fell by 3.3pct last week - marking the third straight week of declines. Prices of single family homes fell for a second straight month in July down by 0.5pct after declining by a revised 1.2pct in June.

Euro zone consumer confidence rose from -11.4 to -11.2 in September. The result was a 32-month high, but below market expectations. Euro zone industrial new orders fell 2.4pct in July.

European shares fell on Wednesday, to their lowest close in two weeks. The banking sector was weighed down by broker downgrades. However investors flocked to the mining sector following the weakness in the US dollar. BHP gained 2.1pct on speculation that a Chinese conglomerate was making an alternative bid for potash. The FTSEurofirst index fell 1.4pct with the UK FTSE down by 0.4pct and the German Dax lost 1.1pct.

US sharemarkets closed lower for the first time in six sessions on Wednesday. The weak Adobe result after the close on Tuesday prompted investors to lock in profits. Microsoft fell 2.2pct despite raising its dividend - which still fell short of investor expectations. The Dow Jones fell 22pts or 0.2pct with the S&P 500 down 0.5pct and the Nasdaq eased by 15pts or 0.6pct.

US long-term treasuries rallied (yields lower) on Wednesday as traders bet that Japanese buyers would use treasury purchases to offset the Yen´s advance against the US dollar. US 2yr yields were flat at 0.43pct and US 10yr yields fell by 3pts to 2.55pct.

The greenback sold off against the Euro as investors continued to digest the US Fed commentary around further stimulus. The Euro rallied from lows near US$1.3270 to US$1.3430, ending US trade near US$1.3390. The Aussie dollar rallied from lows near US94.45c to US95.95c, closing US trade near US95.50. The Japanese yen held between 84.95 yen per US dollar and JPY84.25, ending US trade near JPY84.55.

US crude oil prices fell sixth time in the past seven sessions on Wednesday. US crude stockpiles rose in the past week. Combined commercial inventories of crude and refined products hit a new record of $1.144 billion barrels - the highest levels on record. The Nymex crude oil contract fell by US26 cents or 0.3pct to US$74.71. London Brent crude fell US54 cents to US$77.88 a barrel.

Base metal prices were sharply higher on the London Metal Exchange on Wednesday. Nickel gained 1pct while the other metals rose between 2.2-2.8pct. The weakness in the US dollar supported a drive towards the commodity complex. And the Comex gold price rose to fresh record highs, settling up US$17.80 an ounce to $1292.10.

Ahead: In Australia, no economic data is released. In the US leading indicators, existing home sales are released.