At 12.00pm (AEDT), the benchmark S&P/ASX200 index was off 51.2 points, or 1.48 per cent, at 3397.7
The broader All Ordinaries index shed 48.8 points, or 1.44 per cent, to 3349.2.
"We do have financial stocks down after a pretty poor session on Wall Street last night,'' CMC Markets market analyst David Taylor said.
A lack of detailed information in the US government's economic stimulus package was deterring investors, he said.
"So markets over there are very, very shaky, European and US banks are shaky, and we're shaky, as well,'' he said.
Among the major banks, NAB sagged 52 cents to $17.88 as it said its former head of Australian operations, Ahmed Fahour, would cease to be a member of the board and executive committee.
Commonwealth Bank reversed 55 cents to $29.30, Westpac dumped 48 cent to $16.52, and the ANZ lost 17 cents to $12.43.
In the resiurces sector, global miner BHP Billiton was up 16 cents at $30.32, and Rio Tinto descended $1.95 to $49.83.
Gloucester Coal improved 15 cents to $3.43 after it agreed to a $545 million merger with Whitehaven Coal in a bid to better position the merged group for future growth.
Whitehaven was 9.5 cents lower at $1.42.
Oil and gas producer Woodside Petroleum climbed 43 cents to $33.95, and Santos put on 7 cents at $14.48.
Oil refiner Caltex was down 91 cents, or 9.48 per cent, to $8.69 after delivering a drop in profit for the year and not paying a final dividend.
At 12.08pm AEDT in the gold sector, Newmont was 34 cents poorer at $6.25 after returning to profitability in the fourth quarter as rising gold prices offset a sharp drop in copper demand.
Newcrest slumped $2.27 to $33.63, and Lihir gave away 10 cents to $3.43.
The price of gold in Sydney at 12.11 AEDT was $US973.65 per fine ounce, down $US3.35 on yesterday's close of $US977.00.
Telstra firmed 3 cents to $3.71, and Optus-owner SingTel dipped 5 cents to $2.48.
Retailer Woolworths was off 9 cents at $27.41, and Wesfarmers, which owns Coles, eased three cents to $17.06.
Surfwear maker Billabong International fell 36 cents to $6.21 as it reported a 7.1 per cent decline in first half profit to $82.4 million.
In the media sector, News Corp (the parent company of the publisher of news.com.au) was 30 cents weaker at $10.20, and its non-voting stock ejected 31 cents to $9.20.
Consolidated Media fell 5 cents to $1.84, and Fairfax reversed 2.5 cents to 96 cents.
On Wall Street overnight, the Dow Jones Industrial Average index fell 89.68 points, or 1.19 per cent, to 7465.95 as computer and printer company Hewlett-Packard turned in disappointing fourth-quarter sales.
The broader Standard & Poor's 500 index fell 9.48, or 1.2 per cent, to 778.94, and the Nasdaq composite index lost 25.15 points, or 1.71 per cent, to 1442.82.
On the Sydney Futures Exchange, the March share price index futures contract was 37 points weaker at 3363 on a volume of 9057 contracts.
Share market slightly lower at noon
Shares lower as resources slide
Large banks take beating on Wall Street
