NEW YORK-Falling oil prices and a sur­prise an­nounce­ment from Hewlett-Packard weighed on tech­nol­o­gy and en­er­gy stocks yes­ter­day.

HP plunged 12 per cent af­ter ex­ec­u­tives said that a com­pa­ny HP bought for US$10 bil­lion last year lied about its fi­nances. CEO Meg Whit­man said that there were "se­ri­ous ac­count­ing im­pro­pri­eties" at the search-en­gine com­pa­ny, Au­ton­o­my.

To ac­count for it, HP took an US$8.8 bil­lion charge in its lat­est quar­ter. HP's stock lost US$1.59 to US$11.71.

A warn­ing from the Fed­er­al Re­serve chair­man, Ben Bernanke, about the dan­gers of the "fis­cal cliff" al­so weighed on the mar­ket in af­ter­noon trad­ing. The Dow Jones in­dus­tri­al av­er­age dropped as much as 94 points short­ly af­ter Bernanke spoke. But the stock mar­ket crept high­er through the late af­ter­noon and end­ed the day flat. The Dow dropped 7.45 points to close at 12,788.51. The Stan­dard & Poor's 500 in­dex gained 0.92 point to 1,3827.81.

On Mon­day, the Dow soared 207 points as in­vestors fo­cused on prospects for a deal be­tween the White House and con­gres­sion­al Re­pub­li­cans to avoid the cliff, tax in­creas­es and gov­ern­ment spend­ing cuts set to take ef­fect Jan­u­ary 1.

In a speech to the Eco­nom­ic Club of New York yes­ter­day, Bernanke urged Con­gress to take ac­tion. Asked in a Q&A ses­sion whether the Fed could lim­it the eco­nom­ic hit posed by the bud­get-tight­en­ing mea­sures, Bernanke said: "If the econ­o­my goes off the broad fis­cal cliff, I don't think the Fed has the tools to off­set that."

Many in­vestors ex­pect fi­nan­cial mar­kets to turn tur­bu­lent when Con­gress re­turns from its Thanks­giv­ing re­cess and be­gins bar­gain­ing with the White House to avoid the fis­cal cliff. John Lina­han, head of T Rowe Price's US eq­ui­ty group, said that if those ne­go­ti­a­tions stretch in­to late De­cem­ber, the stock mar­ket could re­sem­ble the wild trad­ing of Au­gust 2011, when mar­kets flipped from big gains one day to steep loss­es the next.

En­er­gy stocks and the price of crude oil fell af­ter the pres­i­dent of Egypt pre­dict­ed that Is­rael's week­long of­fen­sive in the Gaza Strip would end in hours and the Is­raeli prime min­is­ter said Is­rael would be a "will­ing part­ner" to a cease-fire. Crude oil was down US$2.53, or 2.8 per cent, to US$86.75 per bar­rel. It trad­ed above US$89 ear­li­er in the day. En­er­gy stocks in the S&P slipped 0.4 per cent as a group. Tech stocks fared the worst, los­ing 0.6 per­cent.

The Nas­daq com­pos­ite in­dex gained 0.61 of a point to 2,916.68. The yield on the bench­mark ten-year US Trea­sury note rose to 1.66 per cent.