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.
Hewlett-Packard Co. 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 fell to $36.91, near its lowest price over the last 12 months.
Concerns about the economy's strength helped pull down industrial companies like Caterpillar Inc. and Boeing Co. 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 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. "People are worried about big picture issues that need to be resolved."
Even with most companies reporting stronger earnings, the stock market has lost momentum in recent weeks. Concerns are growing that high gas prices will slow the economy, pinch consumer spending and cut into corporate profits.