The threat of a US default has increased after Republicans walked out of negotiations with President Barack Obama to raise the debt ceiling.
Republicans are pushing for deep cuts in government spending while refusing to accept tax rises proposed by the President.
Australian businesses have been warned that any default would create “tremendous uncertainty” in financial markets across the world.
Government strikes “historic” forestry deal
A $276 million deal has been struck to end a standoff in the Tasmanian forestry industry, with money pledged by Prime Minister Julia Gillard to safeguard jobs in the sector.
The Federal Government will pay $133 million upfront to compensate workers affected by the closure of some forestry operations, with 430,000 ha of forest put under “informal” protection.
However, the Greens are unhappy over the deal, claiming that it doesn’t protect enough old-growth forest.
Angry Birds maker sued
The developer of the popular Angry Birds game is being sued by a licencing company for infringing its patents.
Lodsys claims that Rovio, along with other developers, has broken its patents with its Apple and Android games. Lodsys is also embroiled in legal action against software developers, including Apple.
The Dow Jones Industrial Average was down 43.25 points to 12,681.16 on Friday. The Australian dollar was steady at 108.4 US cents.