Stocks Slip on Housing, Tech Weakness

A 10.6% decline in October housing starts raised concerns about the recovery. Investors also weighed disappointing news from Autodesk and Salesforce.com

U.S. stocks closed lower Wednesday as traders decided to take some profits from 2009's substantial equity advance amid some disappointing news on the housing sector. The pullback followed the market's recent rally to 13-month highs.

a surprise 10.6% drop in October housing starts and a 4% drop in building permits raised questions about the strength of the economic recovery.

Also, the U.S. consumer price index (CPI) rose 0.3% in October, while the core index, which excludes food and energy prices, increased 0.2% as a slow economic recovery continues to keep inflation in check.

On Wednesday, the 30-stock Dow Jones industrial average finished lower by 11.11 points, or 0.11%, at 10,426.31. The broad Standard & Poor's 500-stock index was down 0.52 points, or 0.05%, at 1,109.80. The tech-heavy Nasdaq composite index lost 10.64 points, or 0.48%, to 2,193.14.

On the New York Stock Exchange, 16 stocks were lower in price for every 14 that advanced. Breadth on the Nasdaq was 16-10 negative.

Trading was slow, notes S&P, suggesting some uncertainty on the part of traders after the market's lengthy rally.

Among the weakest industry groups in Wednesday's session: The S&P Application Software index fell 2.14% on weakness in Autodesk (ADSK) and Salesforce.com Inc. (CRM).

On the upside, the S&P Retail REIT index gained 2.79% after an unconfirmed report in the Wall Street Journal said Simon Property Group (SPG) is exploring a possible bid for General Growth Properties, which is operating under Chapter 11 protection and is the country's second largest owner of shopping centers.

Treasuries were lower in price. The 10-year note fell to 100-02/32 for a yield of 3.375%. The 30-year bond slipped to 101-7/32 for a yield of 4.306%.

The dollar index was lower at 75.12.

December gold futures were higher at $1,143.40 per ounce, though well off the record $1,153 level reached earlier in the session. Some market watchers think the yellow metal may move to $1,200 soon.

December crude oil futures, aided by the weak dollar and bullish U.S. energy inventory reports, were higher at $79.60 per barrel.

Stock markets in Europe finished mixed Wednesday. In London, the FTSE 100 index shed 0.07%. In Paris, the CAC 40 index declined 0.02%. Germany's DAX index rose 0.16%.

Asian stock markets finished mixed Wednesday. Japan's Nikkei 225 index fell 0.55%, Hong Kong's Han Seng index declined 0.32%, while Shanghai's benchmark index rose 0.62%.

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