The fundamental news about the U.S. economy is still strong, but fear has a firm hold on the market as stocks slide today. As of 3:10 p.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) has fallen 0.17%, while the S&P 500 (SNPINDEX:^GSPC) is down 0.11%.

The Census Bureau said today that the rate of homebuilding in the U.S. jumped to a four-year high of 894,000 homes annually. This is actually big news, because it should have a big impact on employment going forward. This positive news pushed stocks higher early in trading, but Ben Bernanke urged lawmakers to reach some sort of deal on the fiscal cliff and long-term policies related to taxes and spending, which sent shares south in later trading.

The biggest loser on the Dow was Hewlett-Packard (NYSE:HPQ), which fell 12% after announcing an $8.8 billion impairment charge because of accounting issues at Autonomy, which HP acquired in 2011. The ghosts of epically terrible CEO Leo Apotheker are still haunting the company, and investors and regulators will be spending months trying to unravel the problems at Autonomy.

Energy stocks also fell on talk of a cease-fire between Israel and Gaza. Oil fell 2.8% today, and ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) followed by dropping 0.4% and 0.7%, respectively. Peace in the Middle East is good for the world, but it would have the effect of lowering oil prices, so it isn't necessarily good for all stocks.

The fiscal situation and tensions in the Middle East will continue to dominate market sentiment through the rest of the year. But let's not overlook improvement in housing and the upcoming shopping season. If housing and retail continue to improve, it will provide huge upside, especially if the cliff is averted.

Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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