Stocks go adrift

NEW YORK (CNNMoney.com) -- A mixed reading and some disappointing earnings news outweighed a drop in the price of oil Tuesday, leaving stocks slightly lower in midday trade.

The Dow Jones industrial average (down 16.42 to 13,596.56, Charts) straddled the breakeven point about 2-1/2 hours into the session. The broader S&P 500 (down 3.03 to 1,528.02, Charts) index fell 0.1 percent while the tech-laden Nasdaq (down 7.27 to 2,619.33, Charts) composite index lost about 0.2 percent.

In the latest from the battered real estate sector, the Commerce Department reported that housing starts fell to an annual rate of 1.47 million in May, down from 1.53 million in April - a hair below economists' estimates, according to a survey by Briefing.com.

One bright spot in the report was applications for building permits. A key sign of builder confidence, permits came in at an annual rate of 1.5 million, up from 1.46 million last month and beating the projected 1.47 million.

Even though the housing market's woes look like they'll drag on longer than many economists had initially expected, the drag on the economy so far doesn't appear that severe.

"I guess the main question is what impact is the housing market having on the overall economy and it doesn't appear to be very much," said Richard Hoyt, a market strategist for the Minneapolis-based KDV Wealth Management.

Bond prices rose, pushing the yield on the benchmark 10-year note down to 5.11 percent from 5.14 percent late Monday. Bond prices and yields move in opposite directions.

Oil prices ticked lower after hitting a nine-month high on Monday. U.S. light crude oil for July delivery sank 45 cents to $68.64, after climbing more than a dollar the previous session to the highest since September.

In earnings news, Best Buy (down $2.50 to $45.51, Charts, Fortune 500) reported lower quarterly profit that missed estimates. The electronics retailer also issued an full-year forecast that disappointed Wall Street, sending shares sliding about 5.5 percent Tuesday.

Elsewhere on the corporate front, Yahoo (down $0.40 to $27.72, Charts, Fortune 500) announced late Monday that Terry Semel would step down as CEO, to be replaced by company co-founder Jerry Yang. The stock was down over 1 percent in midday trade.

Expedia (up $3.88 to $29.38, Charts) stock jumped about 15 percent Tuesday after the online travel company announced a $3.5 billion buyback of more than a third of its shares.

The Food and Drug Administration granted priority review for Bristol-Myers Squibb Co.'s (up $1.51 to $31.82, Charts, Fortune 500) experimental breast cancer drug ixabepilone, the company said Tuesday, pushing up its shares 4.5 percent in midday trade on the New York Stock Exchange.

The home repair retailer Home Depot (up $0.13 to $38.09, Charts, Fortune 500) is close to announcing a deal to sell its supply division for more than $10 billion to a group of private equity firms, Reuters reported.

Overseas, mining group BHP Billiton (down $0.03 to $58.57, Charts) reportedly is considering a rival bid for aluminum producer Alcan (down $0.35 to $83.20, Charts). Dow component Alcoa (down $0.13 to $41.75, Charts, Fortune 500) has made a $28.7 billion hostile offer for Alcan.

European markets finished mixed Tuesday, while in Asia, Japan's Nikkei index finished slightly higher.

In currency trading, the dollar was little changed against the euro, but was lower versus the yen.

COMEX gold for August delivery rose 70 cents to $660.60 an ounce.

Market breadth was negative. On the New York Stock Exchange, losers beat winners 6 to 5 on volume of 493 million shares. On the Nasdaq, decliners topped advancers by 4 to 3 on volume of 703 million shares