WASHINGTON — House hunters shied away from buying in July, driving down sales of previously owned homes to a 2Z\x-year low. The inventory of unsold homes climbed to a record high.

The figures released Wednesday provided fresh evidence of how much the once-sizzling housing market has cooled.

Prospective home buyers have turned cautious about making such a big-ticket purchase as mortgage rates have gone up and uncertainty has risen over whether the economy and job creation will keep slowing, analysts said.

Existing-home sales dropped 4.1 percent in July from the previous month to a seasonally adjusted annual rate of 6.33 million units, the National Association of Realtors reported. That was the lowest level since January 2004.

The latest snapshot of housing activity was weaker than analysts anticipated; they were forecasting a sales pace of 6.55 million.

On Wall Street, the housing report rattled investors and pushed stocks lower. The Dow Jones industrials lost 41.94 points to close at 11,297.90.

Although sale prices for homes are no longer bounding ahead, some prospective buyers are still waiting for better deals, just one more factor in the weak showing, economists said.

"Many potential home buyers have been on the sidelines, some kicking the tires but mostly waiting for sellers to compromise on prices and terms," said David Lereah, the association's chief economist.

WASHINGTON — Ben & Jerry's Homemade Inc. said Wednesday it will drop an egg supplier accused of mistreating chickens, responding to pressure from the Humane Society of the United States.The ice cream maker's CEO, Walt Freese, said in a telephone interview that dropping Michael Foods Inc., of Minnetonka, Minn., "seemed like the right thing to do." He said the change would be effective next week.The Humane Society said an investigation of a Michael Foods egg farm in June found hens dying of starvation, live hens living among dead ones and sick or injured birds caught in cage wires.The animal welfare group recently launched a campaign dubbed "A Scoop of Lies: Ben & Jerry's and Factory Farm Cruelty," calling on Ben & Jerry's to stop using the supplier and other eggs raised in small cages.Michael Foods said it had not heard from Ben & Jerry's, so it had no immediate comment on the issue Wednesday. The company said this week it planned to switch to larger cages to meet or exceed United Egg Producer guidelines for hen welfare.Freese wouldn't commit to buying only cage-free eggs."We're really evaluating our options," he said. "We have a lot of respect for the Humane Society and their point of view."But the Humane Society's president, Wayne Pacelle, said his group would be satisfied with nothing less than a switch to cage-free eggs."We don't want Ben & Jerry's to simply shift to another battery cage operation," he said.