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Still, a faster-than-expected fall in prices for U.S. single-family homes in September underscored the hurdles remaining for the recovery.

The Conference Board, an industry group, said its index of consumer attitudes increased to 54.1 in November, the strongest since June, from a revised 49.9 in October. Analysts polled by Reuters forecast a reading of 52.6.

Separately, the Institute for Supply Management-Chicago's business barometer rose to 62.5 in November, up from 60.6 in October and above a forecast from economists.

The nation's high unemployment rate has fueled worries about the consumer's ability to spend, although U.S. store chains showed a strong start to the holiday shopping season after last Thursday's Thanksgiving holiday.

The confidence data "backs up what we've been seeing in retail stores, which is that consumers have been spending," said Wayne Kaufman, chief market analyst at John Thomas Financial n New York.

Standard & Poor's/Case-Shiller composite index on Tuesday showed home prices in 20 metropolitan areas declined 0.8 percent in September from August on a seasonally adjusted basis, more than the decline of 0.3 percent expected by economists in a Reuters poll.

Prices rose 0.6 percent from a year earlier, S&P said, but that was slower than the 1.1 percent expected.

"The data confirms what I think a lot of economists suspected, which was that we would see house price weakness again after the expiration of the first-time home-buyer tax credit," said Christopher Low, chief economist at FIN Financial in New York.

In the U.S. markets, lingering worries about euro-zone sovereign debt overshadowed the data, pushing U.S. stocks lower, benchmark 10-year Treasury note prices higher and the dollar up against the euro.

(Additional reporting by Corbett Daly in Washington and Ryan Vlastelica and Emily Flitter in New York; Editing by Padraic Cassidy)