Tuesday, November 20, 2012

Wall Street sinks slightly on negative H-P news

6 min.

Stocks sank early Tuesday on Wall Street. Hewlett-Packard stock suffered a big decline after its executives said that a company HP bought for $10 billion last year lied about its finances.?

The Dow Jones industrial average was down 54 points to 12,741 just after the opening bell. HP, one of the 30 stocks that make up the Dow, declined $1.87, or 14 percent, to $11.43.??

Investors were also reacting to?a credit downgrade of France by ratings agency Moody's.?

Moody's Investors Service cut France's sovereign rating by one notch to Aa1 after the market's close on Monday, citing an uncertain fiscal outlook as a result of the weakening economy.?

Hewlett-Packard CEO Meg Whitman said that there were "serious accounting improprities, disclosure failures and outright misrepresentations" at the company, Autonomy, which makes search engines. She stopped short of alleging fraud.?

HP took an $8.8 billion charge in its latest quarter to bring the accounting value of Autonomy in line with its real value.?

In the broader stock market, the Standard & Poor's 500 index was down five points to 1,381. The Nasdaq composite index, heavy with technology companies, declined nine points to 2,907.?

Consumer discretionary companies, a group that includes hotels, luxury retailers and media companies, managed a small gain. Technology companies fell the most.?

In economic news, the government said that U.S. builders started construction last month on the most homes and apartments since July 2008, more evidence that the housing market's recovery is gaining momentum.?

Homebuilder stocks were among the best performers in the market. PulteGroup gained almost 5 percent, D.R. Horton advanced more than 2 percent, and Lennar gained almost 2 percent.?

On Monday, the Dow soared 207 points. Investors focused on signs over the weekend that congressional Republicans and the White House might be able to reach a deal on tax increases and government spending cuts set to take effect Jan. 1.?

In the bond market, the yield on the benchmark 10-year U.S. Treasury note rose 0.01 percentage point to 1.63 percent.?

The price of crude oil fell 61 cents per barrel, or 0.7 percent, to $88.67.?

The Associated Press and Reuters contributed to this report.?

Source: http://www.nbcnews.com/business/wall-street-sinks-slightly-negative-h-p-news-1C7172739

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