A contraction of 0.6 per cent in gross domestic product in the euro zone was the steepest for the bloc since the first quarter of 2009, while Japan's GDP shrank 0.1 per cent in the fourth quarter, crushing expectations of a modest return to growth.
The persisting weakness in Europe and its implications for global growth and US corporate profits prompted some investors to lock in recent profits.
The S&P 500 is still up more than 6 per cent so far this year and is hovering near its highest level since November 2007.
US data showed the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. That suggests the job market is improving, said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
"But it won't be much of a catalyst for the market this morning because of ... the news out of Europe," he said.
Cardillo said a weaker euro, down 0.8 per cent versus the US dollar, was also a downward pressure on markets.
The Dow Jones industrial average fell 13.86 points or 0.1 per cent, to 13,969.05, the S&P 500 lost 2.18 points or 0.14 per cent, to 1,518.15 and the Nasdaq Composite dropped 8.12 points or 0.25 per cent, to 3,188.76.
Shrinking European economies translated to a 5-per cent drop in revenue from the region for Cisco Systems, which nonetheless beat estimates as it reported its results Wednesday. The company's shares slid 2.6 per cent to $20.60.
General Motors Co reported a weaker-than-expected fourth-quarter profit, also citing bigger losses in Europe alongside lower prices in its core North American market. Still, shares rose 1.3 per cent to $29.05.
Recent news on mergers and acquisitions led some investors to bid up shares of related companies.
H.J. Heinz Co shares jumped 20 per cent after it said that Warren Buffett's Berkshire Hathaway and 3G Capital will buy the company for $72.50 a share, or $28 billion including debt.
American Airlines and US Airways Group said they plan to merge in a deal that will form the world's biggest air carrier, with an equity valuation of about $11 billion. US Airways shares fell 2.4 per cent to $14.31.
Constellation Brands soared more than 31 per cent to $41.80 after terms of its takeover of Mexican brewer Grupo Modelo were revised, granting it perpetual rights to distribute Corona and other Modelo brands in the United States. AB InBev ADRs gained 5.9 per cent to $93.46.
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