NEW YORK — A disappointing report on housing starts made investors nervous about the economy Tuesday and sent stocks lower even as profits at many companies exceeded expectations.
The major indexes slipped about half a percentage point, and the Dow Jones industrials lost 51 points.
Stocks retreated from 2009 highs after the Commerce Department said applications for homebuilding permits fell in September by the largest amount in five months. That is a discouraging signal for future construction.
Investors will get another measure of the housing market’s health Friday with a report on home resales. After several months of upbeat data, the past few weeks have brought signs that a housing recovery could be slowing.
A rebound in the dollar from 14-month lows against other major currencies also hurt stocks by driving down commodities prices and, in turn, sending energy and materials companies lower. Bond prices rose after the government said wholesale prices fell last month.
The housing data and the stronger dollar overshadowed strong earnings reports from Apple, Caterpillar and health insurer UnitedHealth Group.
Earnings are likely to dominate trading today. After the close of Tuesday’s trading, Yahoo and SanDisk turned in profits that were well ahead of analyst expectations. The stocks gained in after-hours electronic trading.
Even with worries about the economy, Tuesday’s drop was modest and not unexpected after stocks had rocketed higher with little break for seven months.
The Dow fell 50.71, or 0.5 percent, to 10,041.48. The broader Standard & Poor’s 500 fell 6.85, or 0.6 percent, to 1,091.06. The index, the basis of many mutual funds, is up 61.3 percent from a 12-year low in early March.
The Nasdaq composite fell 12.85, or 0.6 percent, to 2,163.47.
The retreat in stocks came as many earnings reports were topping expectations, in part because of cost-cutting.
Dan Cook, senior market analyst at IG Markets in Chicago, is concerned that companies aren’t bringing in more revenue. He noted that reducing costs by laying off workers adds to the problems facing the overall economy.
“We call it cost-cutting because that’s kind of the nice term, but in reality a lot of those are consumers,” he said.
