Stocks fell on Wednesday on worrisome outlooks from major software makers and as a surprise drop in new home construction last month prompted concern about the strength of an economic recovery.

The technology sector was the hardest hit after Autodesk Inc forecast fourth-quarter earnings below expectations, and Inc reported a slowdown in new business.

Autodesk slid 11.3 percent to $23.95 and was among the Nasdaq's top drags, while Salesforce tumbled 3.6 percent to $63.22 on the New York Stock Exchange.

Technology has been a strong area of the market, and those two results broke the momentum, said Nick Kalivas, vice president of financial research & senior equity index analyst at MF Global in Chicago.

People have felt the most comfortable there because of the ability of tech to have a global reach, and they see a lot of the spending there as less discretionary per se.

The Dow Jones industrial average <.DJI> slipped 45.20 points, or 0.43 percent, to 10,392.22. The Standard & Poor's 500 Index <.SPX> slipped 3.49 points, or 0.33 percent, to 1,106.83. The Nasdaq Composite Index <.IXIC> shed 16.69 points, or 0.76 percent, at 2,187.14.

The decline brought stocks off the fresh 13-month highs reached on Tuesday. Since hitting 12-year lows in March, the S&P 500 has gained back nearly 64 percent.

The government said housing starts declined to their lowest level in six months, weighed down by a sharp fall in construction activity for both single-family and multi-family dwellings.

Still, the Dow Jones U.S. Home Construction index <.DJUSHB> climbed 1.1 percent, bolstered by a Citigroup upgrade of Pulte Homes Inc
to buy from hold. Pulte rose 4.9 percent to $10.07.

While the decline in new construction raised concerns about the recovery, it could bode well for removing the remaining inventory from the market, something analysts say must happen for the housing sector to recover.

I think this implies new home inventories are going to be even lower next month -- they're already very lean -- and really what stands between the industry doing better is cleaning up the foreclosed, existing supply, Kalivas said.

On the economic front, the overall Consumer Price Index prices rose slightly more than expected in October.

The stock market's losses were kept in check by advances in the financial and materials sectors. The S&P financial index <.GSPF> added 0.5 percent while Ambac Financial surged 38.6 percent to 97 cents after it said the statutory capital of its main unit was well above a regulatory minimum at the end of the third quarter.

Materials were lifted as the price of gold rose to record highs above $1,150 an ounce. Earlier in the session, shares of Newmont Mining Corp jumped nearly 2 percent to a fresh 52-week intraday high at $53.81. By midday, the stock had pared most of its gains but was still up 0.4 percent at $53.02.

(Reporting by Leah Schnurr; Editing by Jan Paschal)