NEW YORK - Stocks dipped in choppy trading on Wednesday as data pointing to yet more weakness in housing suggested the recession is worsening, offsetting a search for bargains following Tuesday's big market slide.
Data showed U.S. housing starts and building permits dropped to record lows in January, with construction plans scrapped as unsold houses stood empty.
Drags included shares of financial companies, big manufacturers and home builders with the market stuck at three-month lows. All 10 components of the Dow Jones home construction index <.DJUSHB> were negative, with Hovnanian Enterprises
The housing data overshadowed the unveiling of President Barack Obama's plan pledging up to $275 billion to stem foreclosures, which was met with some skepticism.
Investors worried the plan would be no quick fix and there was uncertainty about how it would work.
If there was more detail as to how the housing plan would be implemented, the market would have a clearer reaction, said Joe Arsenio, president of Arsenio Capital Management in Larkspur, California.
The market is attempting to form another bottom but sentiment has eroded even further since the election, on the assumption that plans would be in more precise and understandable form by this time.
The Dow Jones industrial average <.DJI> fell 25.48 points, or 0.34 percent, to 7,527.12. The Standard & Poor's 500 Index <.SPX> lost 3.81 points, or 0.48 percent, to 785.36. The Nasdaq Composite Index <.IXIC> declined 3.00 points, or 0.20 percent, to 1,467.66.
Nasdaq was cushioned by bargain hunting, as investors snapped up shares of big cap technology companies. Google
But shares of luxury home builder Toll Brothers
Among financials, shares of Citigroup
Shares of Deere & Co
Shares of other big manufacturers also slid, with Caterpillar Inc
(Editing by James Dalgleish)