Rudolf Oultz watches the display board at the Australia Stock Exchange in Sydney, Monday, Aug. 8, 2011. Australian and New Zealand markets have opened lower in reaction to ratings agency Standard and Poor's downgrading of the United States government credit rating from AAA to AA+. (AP Photo/Rick Rycroft)
Rudolf Oultz watches the display board at the Australia Stock Exchange in Sydney, Monday, Aug. 8, 2011. Australian and New Zealand markets have opened lower in reaction to ratings agency Standard and Poor's downgrading of the United States government credit rating from AAA to AA+. (AP Photo/Rick Rycroft)

Australian shares are slightly higher mid-session, with iron ore miner Fortescue Metals posting big gains in a subdued session.

At 9.50am, the benchmark S&P/ASX200 index was up 13.9 points, or 0.3 per cent, at 4649.1, while the broader All Ordinaries index was up 15.5 points, or 0.3 per cent, at 4661.1.

On the ASX 24, the March share price index futures contract was five points higher at 4618 with 2718 contracts traded.

About 350 million shares had traded hands by 9am, well below the typical level of about 1.3 billion.

The combination of the holiday season and a lack of major economic news across the globe were the reason for the subdued trade, CommSec market analyst Steven Daghlian said.

"Investors haven't really come back into the market yet," he said.

"At this time of year things are very quiet, and overnight a lot of world markets, particularly in Europe, were closed.

"The US was open but not a lot happened there so there is not much to move the local market."

The Dow Jones Industrial Average dropped 0.19 per cent to 13,114.59, as the chance of politicians agreeing on measures to avert tax rises and spending cuts due to be implemented from January 1 becomes more remote.

Members of Congress are expected to return to Washington in the early hours of Thursday in the United States to resume talks.

Fortescue Metals was a standout on the local market, up 10.5 cents, or 2.4 per cent, at $4.455 after announcing it would resume work expanding the Kings deposit at its Solomon iron ore mining hub in January after a pick up in commodity prices.

Laboratory operator ALS was another stock to post strong gains, up 41 cents, or 3.9 per cent, at $10.94.

The retail sector was another area of strength, after reports of relatively strong sales on Boxing Day.

Myer was up six cents at $2.13, David Jones had added 4.5 cents to $2.385, Harvey Norman gained two cents to $1.875 and JB Hi-Fi was 15 cents higher at $10.38.

Bank shares were mostly lower though, with Westpac down six cents at $26.11, Commonwealth off 14 cents at $62.19 and ANZ down 4.5 cents to $24.925.

NAB was up three cents at $24.91.

In the mining sector, BHP Billiton had added 19 cents to $37.05 and Rio Tinto was up 67 cents at $65.51.

The West Australian

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