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.
HP 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’s shares fell to $36.91, near a 52-week low.
Concerns about the economy’s strength helped pull down industrial companies such as Caterpillar and Boeing. 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.
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.
The Dow industrials lost 68.79 points, or 0.5 percent, to 12,479.58. The Standard & Poor’s 500 lost 0.49, or less than 0.1 percent, to 1,328.98. The Nasdaq composite rose 0.90, also less than 0.1 percent, to 2,783.21.
“There’s just not a whole lot to drive the stock market higher right now,” said Richard Sichel, chief investment officer at Philadelphia Trust. “The housing improvement has been pushed down the road. Some big companies are cutting forecasts. The European debt crisis is in everyone’s minds.
“We were off for a good start this year. I see some pause as investors turn a bit more defensive.”
The S&P 500 has extended a two- week decline amid investors’ concern that Greece may have to restructure its debt and as economic data missed forecasts.
Citigroup’s U.S. Economic Surprise Index, which gauges the rate at which data are exceeding or trailing economists’ estimates, turned negative this month and is at its lowest level since August. The index had climbed to a record in March.
Still, analysts have raised full-year earnings estimates in the S&P 500 index by 2.2 percent since April as more than two-thirds of companies that reported earnings beat projections.
