Wall Street sags on bleak housing view

By Emily Chasan

NEW YORK (Reuters) - Stocks slipped on Wednesday following a negative assessment of the housing market from a large home builder and a Federal Reserve report indicated some U.S. regions were seeing slowing economic growth.

Stocks gave up gains in the last hour of trading after the chief executive of D.R. Horton Inc. (DHI.N) delivered an unusually blunt evaluation of the residential real estate market.

Energy stocks, including Exxon Mobil Corp. (XOM.N), rose after a jump in crude oil prices, and investors snapped up some beaten-down shares of mortgage lenders, including Fremont General Corp. FMT.N, on a report that it has several suitors interested in its mortgage unit.

"What you get here is the economy is weak," said Joseph Battipaglia, chief investment officer for Ryan Beck & Co. in Philadelphia. "I just think this erosion of profitability in an economy that's weaker than expected, alongside a Fed that's basically going to sit on the sidelines, means that stock prices need to come in further."

The Dow Jones industrial average .DJI declined 15.14 points, or 0.12 percent, to end at 12,192.45. The Standard & Poor's 500 Index .SPX shed 3.44 points, or 0.25 percent, to finish at 1,391.97. The Nasdaq Composite Index .IXIC dropped 10.50 points, or 0.44 percent, to close at 2,374.64.

A BUILDER'S UNVARNISHED VIEW

Economic concerns were at the top of Wall Street's worry list ahead of Friday's February jobs reports, which investors will use to take the economy's pulse.

The chief executive of home builder D.R. Horton said at an analysts' conference that the current year for his company was "going to suck," spurring worries about weakness in housing.

"The housing market, which is the weak spot in the economy ... is the main fear of a recession, and the main fear on earnings" growth, said Milton Ezrati, senior economic strategist at Lord Abbett & Co. in Jersey City, New Jersey.

D.R. Horton's stock, which had been up before the last half hour of trading, dropped to finish down 1 penny at $24.55.

Also on the economic front, the Federal Reserve's Beige Book of economic conditions showed the central bank was seeing slower growth in several regions.

Chicago Federal Reserve President Michael Moskow also said inflation was still a risk, adding that he would not rule out another interest-rate hike.

ENERGY SECTOR CUSHIONS THE FALL

Crude oil for April delivery CLJ7 rose $1.13, or 1.9 percent, to settle at $61.82 a barrel on Wednesday after a government report showed a surprising drop in U.S. crude supplies.

Exxon Mobil ranked as the top positive influence in the S&P 500 and helped limit the broad market index's decline. Exxon Mobil's stock rose 0.9 percent, or 64 cents, to $71.64. The stock also helped curb the Dow's loss.