WRAPUP 3-US confidence declines to lowest since February

* Consumer confidence index falls to 48.5 in Sept

* S&P/Case Shiller home prices declines 0.1 pct in July

* CEO Economic Outlook Index dips to 86 in 3rd qtr
(Updates with U.S. market closing prices, adds gold prices)

By Caroline Valetkevitch

NEW YORK, Sept 28 (BestGrowthStock) – U.S. consumer confidence fell
to its lowest level in seven months in September, underscoring
lingering worries about the strength of the economic recovery.

But in a sign of stabilization in the housing market, U.S.
home prices hovered above multi-year lows without the help of
the homebuyer tax credit that ended in April.

The day’s data is the latest to give a mixed signal on the
economy, with a 9.6 percent unemployment rate and still-tight
access to credit among factors hurting consumers and keeping
concerns about a double-dip recession alive.

“With unemployment at a 26-year high, confidence among
consumers remains weak. This decline in sentiment will give the
Fed a stronger reason to increase stimulus in November,” said
Kathy Lien, director of currency research at GFT in New York.

The Federal Reserve said last week it was prepared to put
more money into the economy, if needed, to stimulate the
recovery and avoid deflation.

The Conference Board’s index of consumer attitudes fell to
48.5 in September from a revised 53.2 in August, pressured by a
weak labor market and environment for companies. For details,
see [ID:nN28171795]

That was below the median of forecasts from analysts polled
by Reuters, which was for a September reading of 52.5. The
August reading was revised down slightly from an original
53.5.

The report also showed inflation expectations eased
slightly, even with the Fed’s stance on the economy.

U.S. stocks (Read more about the stock market today. ) (.SPX: ) initially extended declines following
the confidence data, but ended the day higher as investors
snapped up some of the month’s better-performing sectors. [.N

Though weak stock market prices weighed on consumer morale,
the benchmark Standard & Poor’s 500 index is on track to rise
9.4 percent in September after a 4.7 percent decline last
month.

“Consumer confidence is being sapped by high unemployment,
low equity prices and now a renewed decline in house prices.
This all suggests that the outlook for consumption growth
remains ominous,” said Paul Dales, a U.S. economist at Capital
Economics in Toronto.

The 30-year Treasury yield (US30YT=RR: ) fell nearly 7 basis
points to 3.66 percent, its lowest in about three weeks, while
the dollar slumped (EUR=EBS: ) against the euro.

At the same time, gold rose to a fresh record high as
reports fueled views the central banks would stimulate the
economy with new liquidity.

The Standard & Poor’s/Case-Shiller data showed U.S. home
prices declined in July.

The index of 20 metropolitan areas was down 0.1 percent in
July from June on a seasonally adjusted basis, as expected in a
Reuters poll. But it followed a 0.2 percent June rise, which
was revised down from a 0.3 percent increase.

BUSINESS OUTLOOK WEAKENS

Last Friday the Thomson Reuters/University of Michigan’s
preliminary September reading on U.S. consumer sentiment was
worse than expected and at the weakest level in more than a
year.

In another sign of concerns over the outlook for the U.S.
economy, a U.S. Business Roundtable survey found the number of
CEOs who expect their companies’ sales and U.S. headcount to
rise over the six months declined in September.
[ID:nN28156758]

The Business Roundtable’s CEO Economic Outlook Index
declined to 86 in September from 94.6 in June.

In contrast to U.S. sentiment indicators, overseas data
Tuesday showed the consumer mood in Germany and Italy improved
and French consumer spending rose during the summer.

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GRAPHICS:

U.S. consumer confidence: http://link.reuters.com/mew75p

Home prices: http://link.reuters.com/wus75p

Insider video interview with David Blitzer of Standard and
Poors on the CaseShiller house price index, click on:

http://link.reuters.com/jar74p

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

President Barack Obama, who is travelling across the United
States this week to try to drum up voter enthusiasm ahead of
the November U.S. congressional elections, signed a $30 billion
small business lending bill into law on Monday.

With worries about the economy in the forefront, opinion
polls suggest the Nov. 2 mid-term elections could result in the
Republicans wresting control of Congress from the Democratic
Party.

HOME PRICES UP VERSUS YEAR AGO

S&P, which publishes the home price indexes, also said home
prices in the 20 cities index rose 3.2 percent from July 2009,
a slower annual pace than the 4.2 percent increased in June.

Data last week showed new home building rose in August and
sales of previously owned houses crawled off a 13-year low.

Analysts have been watching for signs of stability in the
housing market after declines seen with the end of a tax credit
for home buyers in April.

“People are still waiting to get a set of numbers that has
absolutely none of the government incentive in it for home
buyers. From what I was able to gather, we are a couple of
months away from that,” said Peter Jankovskis, co-chief
investment officer at Oakbrook Investments LLC in Lisle,
Illinois.
(Additional reporting by Lucia Mutikani, John Parry, Wanfeng
Zhou, Lynn Adler, Scott Malone and Charles Mikolajczak; Editing
by Andrew Hay and Diane Craft)

WRAPUP 3-US confidence declines to lowest since February