U.S. stocks were little changed, following the biggest advance in two months in the Standard & Poor’s 500 Index, as a tumble in Hewlett-Packard Co. shares tempered data showing an unexpected increase in housing starts.
HP slumped 12 percent as it announced a charge of $8.8 billion linked to its Autonomy Corp. business, saying there were “accounting improprieties” before its 2011 acquisition of the company. Intel Corp. dropped 2.7 percent after UBS AG cut its recommendation for the largest chipmaker. Best Buy Co. sank 14 percent as the largest consumer-electronics retailer reported a $10 million loss on weaker-than-expected sales.
The S&P 500 fell less than 0.1 percent to 1,386.69 at 10:24 a.m. in New York. The Dow Jones Industrial Average dropped 22.84 points, or 0.2 percent, to 12,773.12. Trading in S&P 500 companies was almost in line with the 30-day average at this time of day.
“There are lots of things going on,” said Madelynn Matlock, who helps oversee about $14.7 billion at Huntington Asset Advisors in Cincinnati. “The housing data is great because it’s good for the overall economy looking forward. Still, companies like Best Buy and HP have had problems for a while and they are not getting any better. Everybody is on the sidelines waiting to see how Europe deals with extending more credit to Greece.”
Housing starts in October rose to a four-year high. European finance ministers will try to plug a 15 billion-euro hole in Greece’s finances and win over the International Monetary Fund in the latest installment of three years of debt- crisis brinkmanship. The meeting comes a day after France lost its top credit rating with Moody’s Investors Service.
Stocks capped a two-day rally yesterday amid better-than- forecast housing data and as President Barack Obama expressed confidence on a budget agreement with Congress. The benchmark gauge for U.S. equities gained 2.5 percent in two days, the most since July.
“One day it’s risk on, the next it’s risk off,” said Benoit de Broissia, an analyst at KBL Richelieu Gestion in Paris. “Visibility is limited and the market can over-react in one direction or another.”
HP tumbled 12 percent to $11.66. The charge from the acquisition of Autonomy was due to “accounting improprieties, disclosure failures and outright misrepresentations” that happened before Hewlett-Packard purchased the company last year for $10.3 billion. HP also forecast fiscal first-quarter profit that missed analysts’ estimates amid a continuing slump in personal computer sales.