By Greg Peel

The Dow fell 74 points, or 0.6%, while the S&P lost 0.6% to 1419 and the Nasdaq dropped 0.7%.

Ben Bernanke, in his attempts to bring more transparency to Fed policy, has introduced uncertainty. Up until yesterday, the Fed's zero interest rate policy was in place "at least until" mid-2015, which represented an extension from an earlier 2014 target. While such a target is still a little vague, given we don't exactly know what might trigger a reversal of policy in the lead-up to mid-2015, it is not as confusing as the new target replacing the time factor ? 6.5% unemployment.

By what measure? Non-farm payrolls? What about the false impression created by a reduction in the participation rate? And will traders be standing there one Friday waiting for the jobs release and see 6.4% ? all hell breaks loose ? or 6.6% ? as you were? Then there's the inflation caveat, which must remain below 2.5%. Same deal ? if the core CPI comes out at 2.6% one month, do we panic?

Suffice to say, Bernanke left Wall Street feeling a little uneasy yesterday. He also reiterated, in a press conference, an earlier warning that the Fed did not have the tools to prevent a recession if the US goes over the Cliff. And on that score, the pathetic, petty, public politicking continued last night, with both sides accusing each other of holding up proceedings. Boehner and Reid ? the two most tedious people on the face of the planet.

After a grafting but solid run recently, based on Wall Street's assumption the above jokers would never actually let America go over the Cliff, it was perhaps time to see some profit-taking. And let's not forget the incentive to lock in profits at a 2012 tax rate.

US retail sales rose by 0.3% in November, which was a positive result following an equivalent fall in October. Removing petrol sales (prices were lower in the month), sales rose a healthy 0.8%, buoyed in part by a Sandy bounce-back effect. Online sales jumped 3% to mark the biggest gain in 13 months. The loser was department stores. You have been warned.

It was nevertheless not a day for data on Wall Street, with Ben and Cliff overhanging all. No one much noticed, but Greece finally received its bail-out tranche, which means we can thankfully forget all about the Greeks right up until the troika threatens not to give them the next one. The eurozone supposedly moved "closer to fiscal union" when last night EU finance ministers agreed the ECB would oversee all large eurozone banks.

We may see a return to focus on global data tonight, following a whole lot of flashing. HSBC will release its flash estimate of China's December manufacturing PMI today, and the eurozone and US will follow suit with equivalent numbers tonight. The US will also see industrial production figures for November. Everyone's well and truly over The Cliff, as opposed to over the cliff, but it seems there's little we can do about it before New Year's. Cliff will remain the boring guest at the dinner party.

It has nevertheless been announced that Boehner and Obama will meet at the White House at 9am Sydney time. Wall Street has seen this as more positive than negative, hence the Dow recovered slightly from a 94 point fall pre-announcement to its closing price.

And as noted, the Fed has introduced confusion. The central bank's forecasts have US unemployment falling to 6.5% by 2015, meaning the target for low rates in much the same as it was. However there is always the possibility the target could be met in a shorter timeframe, which is perhaps why gold dropped US$13.90 to US$1697.50/oz last night despite the US dollar index being little changed at 79.92. Silver fell 2.7%.

In a similar vein, the US ten-year yield rose another 3bps to 1.73%.

The LME had closed on Wednesday night before the release of the Fed statement, so across the board 1% falls for the base metals represent a first response. The oils were also soggier, with Brent dropping US$1.59 to US$107.91/bbl and West Texas S64c to US$86.13/bbl.

On the other hand, you can't kill iron ore with a gun at the moment. The Chinese spot price is up another US$1.40 to US$126.40/t.

The SPI Overnight was down 7 points.

So we await any outcome from the White House discussions this morning. Will the meeting be brief and curt or lengthy and conciliatory? Will it end in stalemate or progress towards compromise? This will determine Wall Street's direction tonight.

We apologise, but FNArena will be unable to bring you an Afternoon Report (What Happened Today?) this afternoon. WHT will return on Monday.

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