Stocks Slide as Tech Takes a Hit
Stocks declined Wednesday as investors grew jittery over a government report showing that housing starts fell sharply in October.
Techs, which have been an investor favorite as of late, took a hit after engineering-software maker Autodesk delivered a weaker-than-expected outlook and customer-relations software maker Salesforce.com reported a slowdown in new business.
Housing starts unexpectedly fell 10.6 percentto their lowest level in six months, weighed down by a sharp decline in construction activity for both single-family and multi-family dwellings.
At the same time, the consumer price index rose 0.3 percent, indicating that inflation may not be quite as benign as some economists have indicated.
At the halfway point, HP , Intel and Disney were the biggest drags on the Dow. Bank of America and McDonald's were the indexes biggest gainers.
Techs were mostly lower but AMD , which announced a private debt offering of $500 million, and Analog Devices , which was put on Goldman Sachs' "conviction buy" list, advanced.
In other analyst action, Collins Stewart reiterated its "buy" rating on Microsoft .
An interesting twist in the Cadbury saga: Hershey is reportedly considering a joint bid with Italy's Ferrero, famous for its Nutella spread and Ferrero Rocher choclates, for the British chocolatier. Up until now, Kraft Foods was the only bidder but Cadbury wasn't happy with the offer.
In other M&A news, American Expressagreed to buyInternet-payment company Revolution Money for $300 million.
Tobacco stocks could see action after JPMorgan raised its view on the sector and upgraded Reynolds American to "neutral" from "underweight."
Retail earnings have been in focus this week as the holiday shopping season approaches - and today's light earnings calendar does include some more companies in that sector.
BJ's Wholesale shares fell as the warehouse club operator's profit for the third quarter that ended Oct. 31 fell to $17.7 million, or 32 cents a share, from $28.2 million, or 48 cents a share, a year earlier.
Limited Brands will have its quarterly numbers after the closing bell.
JCPenney announced plans to stop publishing its twice-yearly "big book" catalog as more consumers are doing their shopping online.
Delta Air Lines and alliance partners are offering $1 billion to Japan Airlines to sway the money losing carrier from its affiliation with American Airlines .
Toyota posted its first year-over-year global sales increase in October in 15 months, with sales rising 5 percent.
A notable event occurs as the Dow chalks up its ninth gain in 10 sessions Tuesday: The blue chip average rose at the same time the dollar index gained ground. Yesterday was only the 6th time in 24 sessions that this has occurred, stirring speculation that the dollar down/stocks up equation is beginning to erode.
Gold hit a new high of $1,151 a troy ounce as the CPI report stirred inflation worries.
Oil topped $80 a barrel after a report showed crude supplies fell by 900,000 barrels last week — three times of what was expected.
Major indexes notched modest gains on Tuesday but it was enough to propel them once again at their highest closes in more than a year.
— Peter Schacknow and Rick Santelli contributed to this article.
Still to Come:
WEDNESDAY: Earnings from Limited after the bell
THURSDAY: EU chooses new president; Fed's Plosser, Fisher speak; Ghosn, Rattner speak; weekly jobless claims; leading indicators; Philly Fed; Geithner speaks; Earnings from Sears, Dell, Gap
FRIDAY: Fed's Plosser speaks; state-by-state jobs report
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