NEW YORK (TheStreet) -- Tech giants were dragging on markets on Wednesday as investors waited on the sidelines ahead of minutes from the Federal Reserve's October meeting.

Microsoft (MSFT) and Yahoo! (YHOO) led the Nasdaq lower, dropping 1.5% and 2.6%, respectively, while software-as-a-service provider Salesforce.com (CRM) tumbled 2.3% ahead of its earnings report after Wednesday's closing bell.  

BlackBerry (BBRY) shares were falling 5.8% after getting hit with a downgrade from Morgan Stanley. Analysts said the market is currently too optimistic on the company's turnaround. Morgan Stanley analysts also snipped 2015 earnings estimates for Tesla (TSLA) on the back of the delayed Model X launch. Shares of the electric-vehicle maker slid 3.9%.

The S&P 500 was down 0.5%, the Dow Jones Industrial Average slipped 0.33%, and the Nasdaq fell 0.8%. On Tuesday, the S&P 500 reached a record high as oil prices slumped.

Though markets moved lower, mostly a reaction to the record highs a day earlier, big trades were being kept off the table as investors focused on what the Fed might reveal in its notes from the Oct. 28-29 meeting. Wall Street is particularly keen on hearing discussions about the end of the central bank's bond-buying program and hints as to where members stand on when to raise interest rates. The minutes from the Fed meeting will be released Wednesday afternoon.

"The minutes may shed light on the committee's surprisingly balanced characterization of inflation, which could have been considerably more dovish, given the notable decline in key measures of inflation expectations in advance of the October meeting," Credit Suisse analysts wrote in a report.

Fed anticipation wasn't enough for investors to overlook an unexpected 2.8% decline in October housing starts to 1.01 million compared to an upwardly revised pace of 1.038 million a month earlier.

"Following yesterday's rise in the NAHB Index, there appears to be a significant amount of confidence amid home builders breaking ground on new projects as low financing costs and improvement in the labor market are expected to bring new demand for housing," Sterne Agee chief economist Lindsey Piegza said in a research note.

Building permits (an indicator of future construction) jumped 4.8% to a 6.5-year high, a hint that the housing market recovery was still very much on track. Starts for single-family homes, which typically give a bigger economic boost than apartment dwellings, also increased for the second consecutive quarter.

"After a surge in buying activity in mid-2013 sparked by the Fed's taper talk, demand slipped noticeably and has since been unable to recapture the highs of 2013," Piegza added. "In the end, without jobs and income growth, consumers remain restrained, translating into positive, but modest demand."

European markets were mixed after a solid rally a day earlier as the region celebrated a return of German confidence in the latest ZEW survey.

Japan's Nikkei was down after a tumultuous week. Overnight, the Bank of Japan reiterated its policies and forecasts despite the world's third-largest economy dipping unexpectedly into recession earlier in the week. The surprise forced Prime Minister Shinzo Abe to shelve an unpopular sales tax until 2017.

Consumer names were among the best performers of the day. Lowe's (LOW) added 6.2% after beating earnings estimates and lifting its full-year sales growth forecasts. Office-supplies retailer Staples (SPLS) was also higher, up 9.2%, after posting a 9% increase in sales over its online platform.

Target (TGT) was up 4.7% after beating profit forecasts and reporting a 1.2% increase in U.S. comparable-store sales. The retailer also said year-to-date costs for its 2013 data breach have amounted to $140 million. Total expenses of $248 million since its fourth quarter have been partially relieved by a $90 million insurance claim.

Cliffs Natural Resources (CLF) was tumbling 12.6% after announcing it is looking to exit its iron ore operations in eastern Canada, which could mean the closure of Bloom Lake in Quebec. Closing the Bloom Lake mine could mean a cost as high as $700 million through to 2020.

--Written by Keris Alison Lahiff in New York.

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