Stocks snapped a three-day winning streak on Wednesday after a report showed housing starts fell sharply in October and weak outlooks from two software firms.
The Dow Jones Industrial Average and S&P 500 lost 0.1 percent. The tech-heavy Nasdaq tumbled 0.5 percent.
Techs, which have been an investor favorite as of late, took a hit after engineering-software maker Autodesk [ ADSK 29.11 
-0.31 (-1.05%) ] delivered a weaker-than-expected outlook and customer-relations software maker Salesforce.com [ CRM 76.02 -0.89 (-1.16%) ] reported a slowdown in new business. The stocks dropped 10 percent and 3 percent, respectively.
Housing starts unexpectedly fell 10.6 percent to their lowest level in six months, weighed down by a sharp decline in construction activity for both single-family and multi-family dwellings.
At the same time, the consumer price index rose 0.3 percent, indicating that inflation may not be quite as benign as some economists have indicated.
HP [ HPQ 52.49 -0.24 (-0.46%) ] was the biggest drag on the Dow, down 1.6 percent, while Bank of America [ BAC 16.82 -0.26 (-1.52%) ] was the biggest gainer.
Bank of America rose 3.7 percent after billionaire hedge-fund manager John Paulson said he expects the stock to double in the next few years.
Techs finished mostly lower but AMD [ AMD 9.11 -0.28 (-2.98%) ], which announced a private debt offering of $500 million, and Analog Devices [ AMD 9.11 -0.28 (-2.98%) ], which was put on Goldman Sachs' "conviction buy" list, advanced.
In other analyst action, Collins Stewart reiterated its "buy" rating on Microsoft [ MSFT 29.59 -0.02 (-0.07%) ].
Dell [ DELL 14.41 -0.14 (-0.96%) ] rose 0.7 percent ahead of the computer maker's quarterly results, due out Thursday.
An interesting twist in the Cadbury [ CBY 52.0 
+0.0 (+0.00%) ] saga: Hershey [ HSY 42.44 -0.54 (-1.26%) ] is reportedly considering a joint bid with Italy's Ferrero, famous for its Nutella spread and Ferrero Rocher choclates, for the British chocolatier. Up until now, Kraft Foods [ KFT 29.63 -0.20 (-0.67%) ] was the only bidder but Cadbury wasn't happy with the offer.
In other M&A news, American Express [ AXP 40.33 -0.67 (-1.63%) ] agreed to buy Internet-payment company Revolution Money for $300 million.
Colgate shares [ CL 84.84 +0.07 (+0.08%) ] jumped over 3 percent amid buzz that UK consumer-products compan Reckitt Benckiser, which owns the Lysol brand, may be considering a bid for Colgate. In addition to its namesake toothpaste, Colgate owns brands including Softsoap and Palmolive.
And Delta Air Lines [ DAL 12.57 -0.54 (-4.12%) ], along with its alliance partners, is offering $1 billion to Japan Airlines to sway the money losing carrier from its affiliation with American Airlines [ AMR 9.01 -0.53 (-5.56%) ].
Retail earnings have been in focus this week as the holiday shopping season approaches.
BJ's Wholesale [ BJ 35.63 -0.06 (-0.17%) ] shares fell nearly 2 percent after the warehouse-club operator reported its quarterly profit dropped 37 percent and said pricing has been "extremely aggressive" heading into the holiday season.
Limited Brands [ LTD 24.67 -0.08 (-0.32%) ] will have its quarterly numbers after the closing bell.
JCPenney [ JCP 31.42 +0.24 (+0.77%) ] announced plans to stop publishing its twice-yearly "big book" catalog as more consumers are doing their shopping online.
Toyota [ TM 79.56 +0.75 (+0.95%) ] posted its first year-over-year global sales increase in October in 15 months, with sales rising 5 percent.
Gold settled at $1,141.20 a troy ounce, after setting a new high above $1,151, as the CPI report stirred inflation worries.
Oil settled above $79 a barrel, after earlier surpassing $80, after a report showed crude supplies fell by 900,000 barrels last week — three times of what was expected.
Volume was light, with about 1.06 billion shares changing hands on the New York Stock Exchange. Decliners outpaced advancers, roughly 8 to 7.
Still to Come:
WEDNESDAY: Earnings from Limited after the bellTHURSDAY: EU chooses new president; Fed's Plosser, Fisher speak; Ghosn, Rattner speak; weekly jobless claims; leading indicators; Philly Fed; Geithner speaks; Earnings from Sears, Dell, GapFRIDAY: Fed's Plosser speaks; state-by-state jobs report
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