US Stocks: Investors tap the brakes (ext)

NEW YORK (CNNMoney) -- U.S. stocks faltered Wednesday, with the broader market ending lower for a second day, after the latest report on new home sales damped enthusiasm about the economy.

The Dow Jones industrial average (INDU) fell 45 points, or 0.3%, to end at 13,124. Hewlett-Packard (HPQ, Fortune 500) was the biggest drag on the blue chip index after the company announced plans to combine its printer and personal computer divisions.

The S&P 500 (SPX) lost 3 points, or 0.2%, to 1,403.

The Nasdaq (COMP) gained 1 point, or less than 0.1%, to 3,075. The tech-heavy index was supported by shares of Green Mountain Coffee Roasters (GMCR), which surged on news of a deal with Starbucks (SBUX, Fortune 500).

Stocks came under pressure after a realtors group said existing home sales fell in February. The report came after government data released Tuesday showed a dip in new home construction.

Wednesday's housing report caught many investors by surprise and raised concerns about the glut of foreclosures weighing on the market, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

"There was some optimism built into existing home sales," Ablin said. "But the actual number left investors a little disappointed."

Ablin added that trading volumes have been low this month and that "the market is more or less taking a breather." In addition, he said seasonal factors may be behind the listless moves.

Overall, stocks have been supported this year by rising hopes for the U.S. economy and easing concerns about the debt crisis in Europe. But given the strength of the recent rally, analysts say a period of choppy trading is to be expected.

"The market has had an explosive run, so it's not surprising to see some volatility," said Doug Cote, chief market strategist at ING Investment Management.

Cote called the volatility "healthy" and said the market is still poised to go higher this year. He said stocks remain undervalued and that the rally could be sustained by continued improvement in economic data.

"The preponderance of economic numbers have been beating expectations," Cote said, pointing to reports on manufacturing, consumer spending and employment.

The dollar lost ground against the euro, but gained against the British pound and the Japanese yen.

Oil for May delivery rose $1.20 to settle at $107.27 a barrel.

Gold futures for April delivery rose $3.30 to end at $1,650.30 an ounce.