The Dow Jones Industrial Average fell 45.75 points (0.37 per cent) to 12,209.24 in the opening minutes, a day after modest gains for US shares.

The tech-dominated Nasdaq composite eased 2.85 points (0.13 per cent) to 2,269.96 and the Standard & Poor's (S&P) 500 broad-market index shed 6.16 points (0.46 per cent) to 1,327.54.

The markets digested reports from retailers that were slightly above expectations, but ongoing worries about the finance sector kept the mood cautious.

Traders showed a negative reaction to news that troubled bond insurer Ambac was to issue new shares instead of getting an outside capital injection.

Traders were 'glancing nervously at news that Carlyle Capital (the credit fund managed by the Carlyle Group) missed several margin calls yesterday,' said Stephen Malyon at Scotia Capital.

'Credit markets remain nervous overall,' he added. -- AFP