US STOCKS-Wal-Mart, Hewlett-Packard weigh on market

*Market lower as Wal-Mart, Hewlett-Packard shares drop

*Computer hardware, retailers, financials biggest sector drags

*Overshadows earlier optimism on retail sales ex autos (Updates to early morning)

By Kristina Cooke

NEW YORK, May 13 (Reuters) - U.S. stocks fell on Tuesday, after Wal-Mart Stores Inc's (WMT.N: Quote, Profile, Research, Stock Buzz) outlook disappointed and as Hewlett-Packard (HPQ.N: Quote, Profile, Research, Stock Buzz) shares dragged after it struck a deal to buy Electronic Data Systems (EDS.N: Quote, Profile, Research, Stock Buzz) for $12.6 billion.

The developments overshadowed earlier optimism after a government report showed surprising strength in April retail sales, excluding the hard-pressed autos sector.

Hewlett-Packard Co was the top weight on the S&P 500 and the Dow, with its shares down 5.3 percent at $44.27. Some Wall Street analysts were critical of the deal, saying HP was paying a rich premium for a slow-growing business.

While Wal-Mart posted stronger-than-expected earnings, the retailer indicated results for the current quarter could miss Wall Street estimates as it faces a tough economic environment, higher transportation costs and customers who are running out of money between paychecks. Shares fell 1.5 percent to $57.11.

Financial stocks were also a drag after Oppenheimer analyst Meredith Whitney cut her price targets on Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz), Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz), Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) and Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz). Whitney said the outlook was bleaker than reflected in the market. The S&P financials index fell 0.5 percent.