U.S. stocks fell on Wednesday on worrying 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 hardest hit after Autodesk Inc
Autodesk slid 9.3 percent to $24.47 and was among the Nasdaq's top drags, while Salesforce tumbled 4.9 percent to $62.40 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> fell 37.71 points, or 0.36 percent, to 10,399.71. The Standard & Poor's 500 Index <.SPX> slipped 2.74 points, or 0.25 percent, to 1,107.58. The Nasdaq Composite Index <.IXIC> was down 15.59 points, or 0.71 percent, at 2,188.19.
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 2.1 percent, bolstered by a Citigroup upgrade of Pulte Homes Inc
While the decline in the 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.
Also on the economic front, data showed consumer prices rose slightly more than expected in October.
(Editing by Jeffrey Benkoe)