US STOCKS-Wall St dips as tech outlook and housing take toll

                                
  
                                
 * Decline in October housing starts fuels caution
                                
 * Tech sector hit after worrisome outlooks
                                
 * Dow off 0.1 pct; S&P dips 0.1 pct; Nasdaq down 0.5 pct
 * For up-to-the-minute market news, click [STXNEWS/US]
 (Updates to close)
                                
 By Edward Krudy
                                
 NEW YORK, Nov 18 (Reuters) - U.S. stocks broke three days
of gains on Wednesday following worryisome outlooks from two
major software makers and a surprising drop in home
construction last month.
                                
 But stocks sharply cut the session's losses just before
the closing bell as many investors pointed to a strong uptrend
in equities that have pushed major indexes to 13-month highs
in recent days. The S&P 500 has ended down only three times in
the last two weeks
                                
 Business software maker Autodesk Inc <ADSK.O> was cautious
about the outlook for the current quarter, while sector peer
Salesforce.com Inc <CRM.N> reported a slowdown in new
business. The news was a setback to investors looking for
signs of a pickup in demand.
                                
 The government said housing starts declined to their
lowest level in six months, weighed down by a sharp fall in
construction activity for both single-family and multi-family
dwellings, a sign the housing market is still under pressure.
For details, see [ID:nN1899353]
                                
 Henry Smith, chief investment officer at Haverford Trust
Co in Philadelphia, said that despite these setbacks, the
equity market was experiencing tailwinds from low interest
rates, government stimulus spending and signs of economic
recovery.
                                
 "We are of the continued belief that right now, the
tailwinds propelling the market are still outweighing the
headwinds," he said.
                                
 The Dow Jones industrial average <.DJI> dropped 11.11
points, or 0.11 percent, to 10,426.31. The Standard & Poor's
500 Index <.SPX> dipped just 0.52 of a point, or 0.05 percent,
to finish at 1,109.80. The Nasdaq Composite Index <.IXIC> lost
10.64 points, or 0.48 percent, to end at 2,193.14.
                                
 Autodesk shares slid 10.4 percent to $24.20 and weighed on
the Nasdaq, a day after the company, which licenses software
to companies on a per-user basis, warned its recovery could be
hindered by more job losses. Meanwhile, Salesforce fell 3.1
percent to $63.61 on the New York Stock Exchange. For details,
see [ID:nN1747284] and [ID:nN1739572]
                                
 "Technology has been a strong area of the market, and
those two results broke the momentum," said Nick Kalivas, vice
president of financial research and senior equity index
analyst at MF Global in Chicago.
                                
 The Dow Jones U.S. Home Construction index <.DJUSHB>
climbed 0.8 percent, bolstered by a Citigroup upgrade of Pulte
Homes Inc <PHM.N> to "buy" from "hold." Pulte rose 4.6 percent
to $10.04.
                                
 While the decline in new construction raised concerns
about the recovery, it could bode well for removing remaining
inventory from the market, something analysts say must happen
for the housing sector to recover.
                                
 Losses were kept in check by advances in the financial
sector. The S&P financial index <.GSPF> added 0.9 percent
after hedge fund billionaire John Paulson said Bank of America
Corp <BAC.N> stock could double in two years. Bank of
America's shares rose 3.7 percent to $16.35.
                                
 Paulson made his comments in an investor note that was
reported by Bloomberg News.
                                
 Analysts said the inverse correlation between the dollar
and equities -- which has helped to boost natural resource
stocks by lifting the price of dollar-denominated commodities
-- appeared to break down.
                                
A bevy of mining and energy shares declined, even as the
dollar fell and gold hit a record high above $1,150 an ounce.
Freeport McMoRan Copper & Gold Inc <FCX.N> was off 0.8 percent
at $84.69, while ConocoPhillips <CVX.N> slipped 0.2 percent to
$53.58.
                                
 Oil rose 0.7 percent, while the dollar fell 0.4 percent to
a basket of currencies <.DXY>.
                                
Volume was light, with about 1.06 billion shares changing
hands on the New York Stock Exchange, below last year's
estimated daily average of 1.49 billion. On the Nasdaq, about
2 billion shares traded, below last year's daily average of
2.28 billion.
                                
 On the NYSE, declining stocks outnumbered advancers by
about 8 to 7. On the Nasdaq, eight stocks fell for every five
that rose.
 (Reporting by Edward Krudy; Additional reporting by Leah
Schnurr; Editing by Jan Paschal)