The market's reversal came after bearish remarks on the US economy, in particular the country's job market, by Federal Reserve Chairman Ben Bernanke, which some traders said may have accelerated the declines.

Two hours after the open, the Dow Jones Industrial Average was down 57.52 points, or 0.44 percent, at 12,947.60. The Standard & Poor's 500 Index was down 5.94 points, or 0.43 percent, at 1,366.24. The Nasdaq Composite Index was down 13.08 points, or 0.44 percent, at 2,973.68.

The euro hit a session low of $1.3346 against the greenback.

Oil prices fell for a third straight day, with London's Brent crude down 0.6 percent at $120.84 a barrel.

Asian markets mostly extended gains Wednesday on optimism ahead of another ECB refinancing operation while US stocks provided a strong cue after closing at a near four-year high.

The euro was mixed in the afternoon amid expectations of a strong take-up of the European Central Bank's offer of cheap cash to under-pressure lenders, while oil prices rose on concerns over the stand-off between Iran and the West.

Sydney ended 0.84 percent, or 35.9 points, stronger at 4,298.6, Seoul added 1.33 percent, or 26.56 points, to 2,030.25 and Tokyo closed flat, edging up 0.72 points to 9,723.24.

Hong Kong rose 0.52 percent, or 111.35 points, to 21,680.08 and Shanghai was 0.95 percent, or 23.37 points, up at 2,428.49.

The dollar firmed to 80.58 yen from 80.45 yen.

Adding to broad regional confidence was news that Japanese industrial production in January rose by a bigger-than-expected 2.0 percent from the previous month as companies stepped up output of cars and electronic products.

The rise beat average market expectations of around 1.5 percent growth and followed a revised month-on-month rise of 3.8 percent in December.

And in South Korea output unexpectedly increased by 3.3 percent last month from December, easing concerns of a sharp slowdown in the export-dependent nation. Analysts had predicted a 1.2 percent fall, according to a Dow Jones Newswires poll.

On Tokyo's Nikkei index shares in chipmaker Elpida crashed 97.24 percent after the microchip maker's bankruptcy filing on Monday.

Elpida, one of the world's biggest chipmakers, announced the largest corporate failure in Japanese manufacturing history on Monday.

It closed at seven yen Wednesday.