U.S. stocks closed modestly lower Wednesday, after paring deeper losses, as weak housing data and grim outlook from tech companies fuelled worries about the economy.  Stocks struggled to stay near the 13-month high reached the prior session as jittery investors decided to book profits.  Gold prices rose for the fourth straight session.

The Dow, which had slid as much as 77 points in the morning trading, closed down 11.11 points, or 0.1%, to 10,426.31.  The broader S&P 500 index slipped 0.52, or 0.1%, to 1,109.80, while the Nasdaq, hurt by the weakness in tech shares, fell 10.64, or 0.5%, to 2,193.14.  Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.37% from 3.33% late Tuesday.  Crude prices advanced 44 cents to settle at $79.58 per barrel.  Volume remained light, with only 1.063 billion shares trading on the NYSE, and declining issues ahead of advancers by an 8 to 7 margin.

Technology shares were under pressure after Autodesk Inc. (NASDAQ:ADSK) and Salesforce.com (NYSE:CRM) gave grim forecasts and BMO Capital Markets noted Research in Motion (NASDAQ:RIMM), the maker of Blackberry phones, faces increased pressure as consumers opt for cheaper phones.  However, shares in Sprint Nextel(NYSE:S) continued their forward run, jumping 6.7% after the previous session's 13% surge, on reports the company had paid off $1 billion in debt.

A weak housing report fuelled recovery concerns but shares in the sector managed to move higher after Citigroup (NYSE:C) raised Pulte Homes (NYSE:PHM) to “buy," saying the shares are "undeservedly out of favor." Citigroup raised its price target on the firm to to $12 from $11.  DR Horton (NYSE:DHI) rose 1.9% and Ryland (NYSE:RYL) advanced 0.8%, while Toll Brothers (NYSE:TOL) fell 0.9%. 

Financials also helped stem the retreat as hedge fund operator John Paulson noted in a quarterly post to shareholders that Bank of America shares will reach $29.81 by the end of 2011.

Seven of the ten S&P500 industry sectors moved lower Wednesday.  Tech shares slipped 0.6%, followed by 0.5% declines in basic materials, industrials, and utilities, 0.4% drops in oil and gas, 0.2% retreat in consumer services, and a 0.01% fall in consumer goods.  Stemming the retreat in the sector were financials, up 0.8%, and telecommunications, up 0.2%.  In a quarterly post to shareholders, hedge fund operator John Paulson said he expects Bank of America (NYSE:BAC) shares to double over the next few years.

For Immediate Release

Chicago, IL – November 19, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: D.R. Horton (DHI), Pulte (PHM), Owens Corning (OC), Masco (MAS) and EnCana Corporation (ECA).

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Here are highlights from Wednesday’s Analyst Blog:

Housing Starts, Permits Plunge

Housing prices are still under pressure, despite unprecedented steps by the Federal government and the Federal Reserve to prop up the price of that asset class. Artificial government support is not as durable a way to prop up prices as a better balance between supply and demand would be.

Well, if prices are going down, the last thing you want to see is more new supply on the market. Thus, in the long term, the decline in housing starts is a good thing. If we stop building houses for long enough, then population growth will start to bring the vacancy rate down. On the other hand, as Lord Keynes famously said, “In the long run we are all dead."

One thing is abundantly clear: this report was not good news for the homebuilders like D.R. Horton (DHI) and Pulte (PHM), nor was it encouraging to suppliers to the industry like Owens Corning (OC) or Masco (MAS). It is also bad news for millions of construction workers who are now unemployed.

It is also yet another reason for the Fed to keep interest rates down very low for a very long time. The only reason for the Fed to consider increasing the Fed funds rate would be if we were going to have a very sharp V shaped recovery. With Housing Starts and Permits falling again, that just simply is not going to happen.

EnCana Misses, Profit Tumbles

EnCana Corporation (ECA) – a major Canadian oil and gas exploration and production (E&P) company – reported weak third quarter results, hit by lower prices and volumes. Operating earnings per share, excluding hedging and foreign exchange effects, came in at $1.03. This fell short of the Zacks Consensus Estimate of $1.11 and way behind the year-ago profit of $1.92.

Revenues were down 64.2% year over year to $3.9 billion. During the quarter, total production was down 7.0% to 4,387 million cubic feet equivalent per day (MMcfe/d), of which 81% was natural gas. Natural gas production decreased roughly 9.3% year-over-year to 3,551 million cubic feet per day (MMcf/d), while oil and natural gas liquids (NGLs) production was up 3.7% to 139 thousand barrels per day (MBbls/d).

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