Business Blog Posts

The reports reinforced the belief that the U.S. Federal Reserve will embark on another round of monetary policy stimulus to support the economic recovery next week.

U.S. consumer confidence rose slightly in October but remained near historically low levels as concerns about the labor market persisted.

The Conference Board, an industry group, said its index of consumer attitudes rose to 50.2 in October from a revised 48.6 in September.

The U.S. unemployment rate remains stubbornly high at 9.6 percent, according to the Labor Department.

The Federal Reserve, which has already injected $1.7 trillion into the economy by purchasing mortgage-related and government bonds, next meets on November 2-3. Another round of quantitative easing, dubbed 'QE2', is expected to focus on Treasury debt.

The weak labor market is one of the primary reasons why the housing market remains weak.

Prices of U.S. single-family homes fell for a second straight month in August, hovering around recent lows after the expiration of popular homebuyer tax credits, according a Standard & Poor's/Case-Shiller home price report on Tuesday.

"At this point the big factor out there is the foreclosure situation and it certainly doesn't look very good. We have a lot of excess supply to work through, a lot of potential foreclosures and what appears to be an increasing legal mess," David M. Blitzer, chairman of the index committee at Standard & Poor's, said in an interview with Reuters Insider.

"It's going to take quite a while to get housing back on its feet," he said.

The housing market has been struggling since home buyer tax credits expired earlier this year. To take advantage of the tax credits, buyers had to sign purchase contracts by April 30. Contracts originally had to close by June 30, but that was extended by three months.

U.S. stocks were little changed with the S&P 500 stock index down 0.08 percent. U.S. Treasury debt fell in price, while the U.S. dollar extended gains versus the euro.

Another report on Tuesday showed home price gains in August. The U.S. Federal Housing Finance Agency home price index is calculated using purchase prices of houses financed by Fannie Mae and Freddie Mac.

The housing market, however, remains highly vulnerable to setbacks and most economists believe a recovery will be elusive until the labor market improves.

(Editing by Andrea Ricci)