At 1400 GMT the Dow Jones Industrial Average was down 58.96 points (0.47 percent) to 12,489.41.
The broader S&P 500 dropped 3.88 (0.29 percent) to 1,325.59, while the tech-heavy Nasdaq Composite lost 12.54 (0.45 percent) at 2,769.77.
Data on new home-building in April showed the key construction sector of the economy remains very weak despite ultra-low interest rates.
Housing starts tumbled 10.6 percent from March to an annual rate of 523,000, the Commerce Department reported, lower than analysts' projections of about 563,000.
Building permits also fell by 4.0 percent from the prior month to a rate of 551,000, well below expectations.
Wal-Mart shares lost 0.62 percent at $55.88 after reporting earnings that fell in line with expectations but showed weakness in domestic sales.
Computer giant H-P led a fall in tech sector counters, its shares dropping 7.5 percent to $36.83 after cutting its outlook for the coming year due to weak PC sales.
Bond prices rose. The yield on the 10-year Treasury note dropped to 3.12 percent compare to 3.15 percent late Monday, while that on the 30-year bond fell to 4.25 percent from 4.28 percent.
Bond yields and prices move in opposite directions.