Wall St flat; HP gains offset by oil, credit woes

Stocks were little changed on Wednesday as rising oil prices and nagging concerns about the credit crisis offset a strong outlook and profit from Hewlett-Packard, the world's largest computer maker.
Shares of Fannie Mae and Freddie Mac fell to the lowest levels in more than 17 years as concerns mounted that the U.S. housing finance companies may need a government bailout.
U.S. front-month crude shot up $1.96 to $116.49 a barrel after Goldman Sachs reiterated its year-end price forecast of $149 a barrel for U.S. crude.
The headwind from higher oil pummeled shares of big manufacturers, with shares of diversified manufacturers United Technologies and General Electric down 1.3 percent and 2 percent, respectively.
"We're still being driven by the financials and the uncertainties surrounding Fannie and Freddie in particular," said Alan Lancz, president of Alan B. Lancz & Associates Inc, an investment advisory firm in Toledo, Ohio.
"Until that gets resolved, you'll continue to have that uncertainty, and it will be hard for the market to make any progress in that atmosphere."
The Dow Jones industrial average slid 49.91 points, or 0.44 percent, to 11,298.64. The Standard & Poor's 500 Index fell 4.72 points, or 0.37 percent, to 1,261.97. The Nasdaq Composite Index shed 5.82 points, or 0.24 percent, to 2,378.54.
The U.S. Treasury is in regular contact with Fannie Mae and Freddie Mac and their regulators, a Treasury spokeswoman said but declined to confirm a report that the Treasury was due to meet with Freddie Mac executives on Wednesday.
Shares of United Technologies dropped to $64.10 on the New York Stock Exchange, while GE declined to $28.15.
Fannie Mae shares slid nearly 17 percent to $4.97, as Freddie Mac shares dropped about 19 percent to $3.40.
Investors worry that the worsening U.S. housing downturn would make it harder for the two companies to function without a government bailout, which analysts say would effectively wipe out holders of Fannie's and Freddie's common stock.
Even so, the HP news boosted hopes that technology spending will hold up, particularly as demand from abroad offsets weakness in the United States.
Shares of HP, a Dow component, jumped more than 4 percent to $45.37 on the NYSE. Its boost lent support to other big-cap technology stocks, including Apple, which was a top boost to the Nasdaq, rising 1.5 percent to $175.91.