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NEW YORK: Wall Street stocks ended mostly lower Wednesday, as investors consolidated recent hefty gains in the face of some disappointing news on US inflation and housing starts.
Technology shares led the decliners amid a weak outlook from key firms in the sector.
The Dow Jones Industrial Average drifted down 11.11 points (0.11 per cent) to close at 10,426.31, recouping most of the market's early losses.
The technology-rich Nasdaq composite lost 10.64 points (0.48 per cent) to 2,193.14 and the Standard & Poor's 500 broad-market index ended nearly flat, with a loss of 0.52 points (0.05 per cent) at 1,109.80.
The market pulled back after hitting fresh 2009 highs on Tuesday.
Trading opened after a report showed US housing starts tumbled 10.6 per cent in October and permits fell 4.0 per cent, suggesting ongoing weakness in the troubled real estate sector.
A separate report showed US consumer prices rose by a higher than expected 0.3 per cent in October primarily due to higher gasoline prices.
Analysts at Charles Schwab & Co. said the consumer price report is "possibly reviving some inflation concerns that have been subdued" and noted that the news on home construction had served to "sour sentiment on the Street."
Scott Marcouiller at Wells Fargo Advisors said the technology sector was hit by "disappointing forecasts by Salesforce.com and Autodesk," two key companies in the sector.
Some analysts said the market is showing resilience to profit taking despite the spectacular gains of some 60 per cent since March.
"Today's lackluster action isn't helping the S&P 500 and Nasdaq composite to achieve the decisive breakouts I said I wanted to see but it isn't really hurting the technical picture either," said Nick Perry at Schaeffer's Investment Research.
Fred Dickson at DA Davidson & Co. said many investors were waiting for a correction of at least five to 10 per cent before committing new funds to equities.
"Individual investors continue to remain on the sidelines viewing the high unemployment rate and the difficulty of their hometown businesses to obtain financing as reasons to stay away from the equity markets," he said.
"Some are even selling stocks that have returned to price levels seen ahead of the Lehman collapse in September 2008 that triggered the ugly phase of the credit crisis."
Among key stocks, American Express rose 0.51 per cent to US$41.57 after announcing plans to buy Internet payments group Revolution Money for US$300 million.
Kraft Foods dropped 1.37 per cent to US$27.26 after hints of a bidding war developing following its hostile offer for British confectioner Cadbury.
US chocolate rival Hershey, down 2.03 per cent at US$37.63, acknowledged that it is considering its options after a news report said it was mulling a joint bid with private Italian group Fererro. Cadbury's US shares fell 1.0 per cent to US$53.46.
In technology, Salesforce.com slid 3.05 per cent to US$63.61 after the cloud computing group reported a jump in profits but issued an outlook disappointing many investors.
Autodesk, a maker of software for architects and engineers, plunged 10.37 per cent to US$24.20 as it reported a rise in profits but issued no guidance for the upcoming fiscal year.
Bank of America meanwhile rallied 3.68 per cent to US$16.35 after reports that a major hedge fund was boosting its holdings in the major lender.
Wells Fargo also shone in the financial space, rising 1.73 per cent to US$28.86 after announcing plans to buy back US$1.3 billion in auction-rate securities.
Bonds weakened, with the yield on the 10-year US Treasury bond rising to 3.366 per cent from 3.319 per cent Tuesday and that on the 30-year bond at 4.299 per cent from 4.250 per cent. Bond yields and prices move in opposite directions.
- AFP/yb
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