The latest US economic data were disappointing, more than offsetting the decision by Federal Reserve policy makers to stick with their programme of purchasing US$85 billion of bonds a month to bolster growth.
"The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labour market or inflation changes," the Fed said in a statement at the end of a two-day FOMC meeting.
The statement helped Wall Street pare losses momentarily. In afternoon trading in New York, the Dow Jones Industrial Average shed 0.82 per cent, the Standard & Poor's 500 Index fell 0.61 per cent advance, while the Nasdaq Composite Index declined 0.78 per cent.
"The talk of tapering has not only been pushed to the back burner but pushed off the stove altogether. It's not something we're likely to see until 2014," Michael Woolfolk, senior currency strategist at BNY Mellon in New York, told Reuters.
The latest US economic data pointed to weakness in job growth, manufacturing and constructing spending.