NEW YORK - A lower earnings forecast by tech giant Hewlett-Packard and concerns about the economy's strength dragged the Dow Jones industrial average down nearly 70 points Tuesday. Gains in bank and utilities stocks limited the market's overall losses.
Hewlett-Packard Co. fell more than 7 percent. The world's largest technology company by revenue lowered its earnings outlook for the rest of the year, partly because of weaker sales of personal computers. The company fell to $36.91, near its lowest price over the last 12 months.
Concerns about the economy's strength helped pull down industrial companies such as Caterpillar Inc. and Boeing Co. The Federal Reserve said U.S. factories produced fewer goods in April for the first time in 10 months. If the decline continues, it could cut into the earnings of companies that make industrial equipment. The Commerce Department also reported that construction of new homes plunged 11 percent from the prior month.
The two reports drove traders into the relative safety of U.S. government bonds, pushing yields to their lowest level this year. The yield on the 10-year Treasury note sank to 3.10 percent. When bond prices rise, their yields fall.
"There's a high degree of caution right now," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "People are worried about big-picture issues that need to be resolved."
The Dow lost 68.79 points, or 0.5 percent, to 12,479.58. The S&P 500 lost 0.49, or less than 0.1 percent, to 1,328.98. The Nasdaq rose 0.90, also less than 0.1 percent, to 2,783.21.
Even with a majority of companies reporting stronger earnings, the U.S. stock market has lost some of its momentum in the last few weeks. Concerns are growing that high gas prices will weigh on the economy, pinch consumer spending, and cut into corporate profits.
Companies reported mixed results Tuesday. Wal-Mart Stores Inc. said its income rose 3 percent in the first quarter, but sales at U.S. stores open at least a year fell for the eighth quarter in a row. Wal-Mart stock fell nearly 1 percent.
Sales also slipped in the first quarter at Home Depot Inc., but the retailer's income jumped 12 percent and beat analysts' expectations. The stock rose 1.2 percent.
Two stocks fell for every one that rose on the New York Stock Exchange. Consolidated volume came to four billion shares.