Europe's indexes had surged in anticipation of an Obama victory by more than Wednesday's early losses in the run-up to the election results Tuesday. Wall Street too enjoyed its best election day rally since 1984 with the Dow Jones index up 305.45 points, or 3.3 percent, at 9,625.28.
In line with Europe, Wall Street futures were down. Dow futures were down 120, or 1.3 percent, at 9,461, while Standard & Poor's futures were down 14.8, or 1.5 percent, at 988.4.
Some investors in Europe appeared to have sold to lock in gains from the market rise ahead of the election.
"I think that to some degree the markets were expecting an Obama win and there has been an element of buy the rumor, sell the fact," said Neil Mackinnon, chief economist at ECU Group.
Investors also know that Obama will have his work cut out to improve the U.S.'s immediate economic prospects and that Inauguration Day is still more than two months away.
"In the near-term, he can't do anything to alter the economic climate which is looking pretty grim," said Mackinnon.
Further proof of the scale of the downturn in the world's largest economy came Tuesday with the news that factory orders fell 2.5 percent in September from August, much worse than the 0.7 percent drop analysts had predicted.
More bad U.S. economic news is expected later when the payrolls company Automated Data Processing publishes its October jobs report, just ahead of Friday's official data. The consensus is for a 100,000 decline but analysts warn that there may be downside risks.
Attention in Europe is shifting towards Thursday's expected interest rate reductions Thursday from the European Central Bank and the Bank of England.
Both banks are expected to follow the U.S. Federal Reserve's lead and cut interest rates by at least half a percentage point, though there's growing talk that the Bank of England may reduce interest rates by as much as a full percentage point for the first time since four cuts of that size in 1992-3 when Britain's economy was last mired in recession.
The likelihood of the more aggressive interest rate reduction has increased after further dismal British economic data from the Chartered Institute of Purchasing and Supply. Its monthly purchasing managers index for the services sector, which accounts for around two-thirds of the British economy, slumped to 42.4 in October, against 46.0 in September and analysts' expectations of a more modest decline to 56.0.
October's reading is the lowest since the survey started in July 1996 and means that the services sector is in deep recession. A reading below 50 indicates contraction.
"The services PMI survey is a timely and influential indicator, and October's collapse in business activity and pricing power increases the chances of the Bank of England delivering a rate cut in excess of a half-point," said Ross Walker, economist at the Royal Bank of Scotland.
Earlier, Japan's Nikkei 225 stock average advanced 4.5 percent to 9,521.24, and Hong Kong's Hang Seng Index added 3.2 percent to 14,840.16.
Japanese shares were helped by the sharp fall in the value of the yen in recent days as an appetite for risk returned to the market. Major exporters did particularly well, such as Toyota Motor Corp., up 10.3 percent, Canon Inc., up 11.7 percent and Sony Corp., which advanced 6.3 percent.
Australia's main stock index rose 2.9 percent, and Singapore's key stock measure added 2.6 percent. India's Sensex dropped 2.8 percent.
In South Korea, the benchmark Kospi rose 2.4 percent, though pared gains on profit-taking and some concerns that an Obama presidency could mean a harder line on trade, analysts said.
Elsewhere, oil prices retreated after surging above $70 a barrel overnight. Light, sweet crude for December delivery was changing hands at $67.66, down $2.87.
On the currencies front, the euro was down 0.7 percent, at $1.2877, and the dollar was 1.0 percent lower at 98.62 yen.
AP Business Writers Jeremiah Marquez in Hong Kong, Yuri Kageyama in Tokyo and Kelly Olsen in Seoul contributed to this report.