Wall St flat after rout but homebuilders rise on data

By Havovi Cooper

NEW YORK (Reuters) - U.S. stocks were little changed on Friday after the largest sell-off in almost two months in the previous session, but homebuilders rebounded on recent housing data.

The S&P 500 and Nasdaq composite indexes were on track for the largest weekly declines since late June, and the Dow industrials headed for the largest weekly drop since April.

"We are unlikely to see a large-scale correction in the market right now, but it certainly is losing the momentum that took it to strong highs earlier this year." said Rick Meckler, president of investment firm Liberty View Capital Management in Jersey City, New Jersey.

U.S. housing starts rose 5.9 percent in July, compared with a 9.9 percent drop in June. Homebuilders Pulte Group and Lennar Corp. rallied on the news and were among the top percentage gainers on the S&P 500.

In addition, a report on Thursday showed confidence among single-family homebuilders neared an eight-year high in August.

Pulte rose 2.7 percent to $16.37, while Lennar advanced 2.6 percent to $34.17

The Dow Jones industrial average was down 23.08 points, or 0.15 percent, at 15,089.11. The Standard & Poor's 500 Index was down 3.64 points, or 0.22 percent, at 1,657.68. The Nasdaq Composite Index was up 6.01 points, or 0.17 percent, at 3,612.13.

Nordstrom became the latest department store chain to post lower-than-expected second-quarter revenue as its same-store sales slipped, prompting it to lower its full-year sales and profit forecast. Shares fell 3 percent to $57.

Other retailers have disappointed investors with second-quarter earnings. From Wal-Mart and Gap to Macy's and McDonald's , chains that cater to middle- and lower-income Americans are feeling the pinch of an uneven economic recovery.

Adding to the market's concerns, the Thomson Reuters/University of Michigan's preliminary reading on consumer sentiment in August slipped from July's six-year high. August's reading was the lowest in four months.

Yields on U.S. government debt extended a rise, which could lead to steeper borrowing costs for businesses and consumers and pressure stock prices. After a bond market sell-off on Thursday, the benchmark 10-year note's yield jumped to a two-year high.

Green Mountain Coffee Roasters shares rose 3 percent to $75.11 after Nasdaq OMX said the company will replace Life Technologies in the Nasdaq 100 index on August 22.

Pandora Media shares jumped 7 percent to $21.24 following a bullish call on the stock from Goldman Sachs.

J.C. Penney shares fell 3.3 percent to $13.60 as the retailer entered into an agreement with former board member and largest shareholder Bill Ackman, that paves the way for him to sell his stake.

(Reporting by Havovi Cooper; Additional reporting by Rodrigo Campos; Editing by Kenneth Barry)