SYDNEY - The Australian share market closed moderately lower with losses in the gold miners and mining giant BHP Billiton.

At the 1615 AEST close, the benchmark S&P/ASX200 index had dropped 9.2 points, or 0.25 per cent, to 3668.2 and the All Ordinaries index had fallen 5.9 points, or 0.16 per cent, to 3627.2.

On the Sydney Futures Exchange, the June share price index futures contract was two points higher at 3,673, on a volume of 19,579 contracts, according to preliminary calculations.

"The market has been directionless at best after a reasonable lead from the US overnight," ABN Amro Morgans private client adviser Craig Walker said.

"There is no real trend in any of the sectors and the market is treading water at the moment."

Newcrest, Australia's biggest gold miner, slipped 70 cents, or 2.41 per cent, to $28.40, Lihir Gold lost three cents, or 1.05 per cent, to $2.84 and Newmont was 14 cents or 2.53 per cent lower at $5.40.

At 1617 AEST the spot price of gold was US$883.70 an ounce in Sydney, down US$5.50 on Tuesday's local close of US$889.20.

Global miner BHP Billiton surrendered seven cents to $31.49 and rival Rio Tinto added 72 cents to $55.25.

In the US on Tuesday night (AEST), the Dow Jones industrial average rose 127.83, or 1.6 per cent, to 7,969.56, the Standard & Poor's 500 index rose 17.69, or 2.1 per cent, to 850.08, and the Nasdaq composite index rose 35.64, or 2.2 per cent, to 1,643.85.

Among the major banks, Commonwealth Bank added 61 cents to $36.49, National Australia Bank slumped six cents to $21.10, ANZ reversed two cents to $16.35 and Westpac was 25 cents stronger at $19.99.

In news today, BHP Billiton blamed challenging market conditions after recording third quarter production falls in key divisions, which was in line with market expectations.

Contract labour provider Skilled Group Ltd slashed its full year net profit guidance as a result of the worst deterioration in business conditions it has yet seen. Its shares closed down 23.5 cents at $1.35.

Fortescue Metals Group Ltd (FMG) has terminated contracts for the supply of biodiesel to its Cloudbreak iron ore mine in Western Australia. Its shares closed five cents higher at $2.57.

Gaming company Aristocrat Leisure Ltd dropped 51 cents, or 12.81 per cent, to $3.47 after completing a $200 million capital raising.

Telstra Corp has won a contract to provide telecommunication services for Commonwealth Bank of Australia Ltd that could be worth as much as $1 billion over the next 10 years.

Telstra was up six cents at $3.26.

Among the energy sector, Woodside added 13 cents to $37.10, Santos fell 32 cents to $15.88 and Oil Search declined six cents to $5.12.

Among retailers, Woolworths was down 41 cents at $26.37 and Coles owner Wesfarmers added 24 cents to $21.10.

Upmarket department store David Jones was up eight cents at $3.02 and JB Hi-Fi fell 20 cents to $12.35.

Qantas was half a cent higher at $1.935 and Virgin Blue was one cent lower at 29 cents.

At 1634 AEST the top-traded stock by volume was IM Medical Ltd, with 362.57 million shares worth $2.33 million. Its shares were 0.4 cents or 100 per cent higher at 0.8 of a cent.

Preliminary national turnover was 2.39 billion shares worth $3.26 billion, with 501 stocks up, 452 down and 276 unchanged.