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Shares of Lynas Corp, which owns the world's richest known non-Chinese deposit of rare earths, -- materials used in high tech and automotive manufacturing -- jumped over 10 percent after China effectively cut its export quotas by 35 percent for the first half of 2011 compared to a year earlier.

Other rare earths companies, including China Rare Earth Holding Ltd, Arafura Resources Alkane Resources and Greenland Minerals and Energy Ltd also gained between 8 percent 10 percent.

"Export quotas continue to be a tool for the Chinese government to limit the export of China's strategic resource,"

Lynas Executive Chairman Nick Curtis said in a statement.

"The growth in the Chinese domestic market coupled with a decrease in production of rare earths in China is a likely cause for the tightening of export regulations," said Curtis, whose company is aiming to start production in about a year.

China, which produces about 97 percent of the global supply of rare earth minerals, warned against basing its total 2011 export quota based on the first half figures.

"Concerned parties should not estimate full-year quotas for rare earth minerals just by looking at the first set of quotas," the Ministry of Commerce said on Wednesday.

Final quotas will take into account domestic production and demand both at home and abroad, according to the ministry.

Demand for rare earths is set to more than double in less than five years, from 120,000 to 250,000 tons by 2015, according to industry estimates.

Prices have surged for these minerals, used in everything from Apple Inc's iPods to fluorescent light bulbs, since authorities in Beijing slashed their rare earth exports by 40 percent this summer, saying China needed them for its economic development.

The U.S. Trade Representative's office was "very concerned" about China's export restraints on rare earth materials and had raised its concerns with China, a spokeswoman said on Tuesday.

Japanese companies, which bore the brunt of China's action, have been scrambling to secure reliable supplies of the minerals.

Last week, Hitachi Metals Ltd signed a joint venture with U.S.-based Molycorp Inc to help ensure a steady supply -- an announcement that sent its shares up 15 percent in a single trading session.

That followed word earlier this month that Sumitomo Corp agreed to invest $130 million in Molycorp Inc to secure a seven-year supply of the materials.

Since debuting in late July at $14, Molycorp's stock price has nearly quadrupled.

Molycorp owns a rare-earth mine in Mountain Pass, California, which is scheduled to come back on line next year.

(Reporting by James Regan; editing by Balazs Koranyi)

The latest data was at odds with other signs suggesting the economic recovery is accelerating and a separate report last week showing consumer sentiment at its highest level since June this month.

The Conference Board, an industry group, said its index of consumer attitudes slipped to 52.5 in December from an upwardly revised 54.3 in November.

The median of forecasts from analysts polled by Reuters was for a reading of 56.0.

Consumers' labor market assessment worsened. The "jobs hard to get" index rose to 46.8 percent in December from 46.3 percent last month, while the "jobs plentiful" index dropped to 3.9 percent from 4.3 percent.

"U.S. consumers are still worried about high unemployment, housing market stagnation and the generally meager growth they've seen so far," said Kathy Lien, director of currency research at GFT in New York.

Financial markets showed a muted reaction to the consumer and housing data, with traders citing very thin post-Christmas trade.

Separate data on Tuesday showed the Standard & Poor's/Case-Shiller composite index of 20 metropolitan areas declined 1 percent in October from September on a seasonally adjusted basis.

It was the fourth straight monthly decline and steeper than the 0.6 percent decrease economists expected. The fall pushed the index 0.8 percent below its year-earlier level, the first year-on-year drop since January.

Some economists cautioned against reading too much into one month's figures and said the surprising drop in consumer confidence doesn't signal a meaningful shift in the outlook for spending.

Optimism about the outlook for the economy has grown in recent weeks after reports on jobless claims, durable goods and consumer spending suggested the economy perked up a bit in the fourth quarter and appears to be entering the new year with a relatively decent amount of momentum.

Economists also expect a tax cut deal recently signed into law by President Barack Obama to lift growth next year by as much as 1 percentage point. The economy is also getting monetary support from the Federal Reserve's planned purchases of $600 billion in government debt.

Despite the consumer confidence data, U.S. retail sales rose in the week before Christmas as shoppers hurried to finish their gift-buying, putting holiday sales on track to hit the high end of estimates.

Data released on Tuesday by the International Council of Shopping Centers and Goldman Sachs showed retail sales rose 4.8 percent for the week ended December 25 compared to the year-earlier period, helped in part by shoppers who could shop all day on Christmas Eve, which was a day off for many given that Christmas fell on a Saturday this year.

(Reporting by Wanfeng Zhou; Editing by Neil Stempleman)

The Valencia, California-based company said it was informed on Monday that the U.S. Food and Drug Administration would not make a decision on whether to approve the product, a whistle-sized inhaled insulin device, by its December 29 deadline.

MannKind, whose founder and biggest shareholder is Alfred Mann, an 85-year-old entrepreneur who made his fortune developing solar cells, insulin pumps and implantable technology to help hearing, has plenty of detractors.

As of November 30, roughly 24 percent of the company's regularly traded shares were held "short" by investors betting the stock will fall.

The device, known as Afrezza, has already been turned back once by the FDA, which said in March it would not approve the product until it had received more information. The company believes it has provided that information.

In July, the FDA accepted a resubmission on the product, and it was due to make its decision by Wednesday.

MannKind's shares rose 6.4 percent to $8.48 in premarket electronic trading.

(Reporting by Toni Clarke and Esha Dey, editing by Dave Zimmerman)

* Japanese factory output rose for the first time in six months in November, and manufacturers expect to boost production in coming months, suggesting that firm demand in Asia will help the economy resume a recovery early next year.

* Economic data expected for Tuesday include the S&P/Case Shiller home prices indexes for October at 9 a.m. 1400 GMT and consumer confidence for December at 10 a.m. 1500 GMT.

* "We have some economic data today in which we should see a new burst of consumer enthusiasm as consumer confidence jumps up," said Peter Cardillo, chief market economist at Avalon Partners in New York.

* "Japan production rose, another good sign for the global economy. So the rally should continue right up until the new year and into the new year based on stronger economic growth both domestically and globally in 2011."

* Trading volumes, already light for the holiday season, were expected to remain thin as the northeastern United States digs itself out from a blizzard that disrupted air and rail travel at the end of the busy Christmas weekend.

* The blizzard pushed oil prices up to just below a more than two-year high struck the previous session with U.S. crude for February up 40 cents at $91.40 a barrel.

* S&P 500 futures rose 2.8 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 19 points, and Nasdaq 100 futures added 3.75 points.

* Inhaled-insulin developer MannKind Corp (MNKD.O) said the U.S. health regulator would not be able to complete the review of Afrezza by December 29 and would require about four more weeks.

* Nasdaq OMX Group (NDAQ.O) is considering a second stab at setting up a market in Japan with the Osaka Securities Exchange (8697.OS), hoping to attract investors from emerging Asian economies, domestic media reported.

* Shares in Japan and China eased on Tuesday as concerns that further Chinese monetary policy tightening will cool the engine of world economic growth.

* European shares rose on Tuesday, with Alcatel-Lucent (ALUA.PA) leading gains in the technology sector after it agreed to settle a bribery case, though volumes were low as the London equity market remained closed. .EU

* Wall Street erased losses and ended little changed on Monday as investors shrugged off the surprise weekend interest rate hike from China's central bank.

(Reporting by Chuck Mikolajczak; Editing by Padraic Cassidy)

It is the first major purchase by Japan's No.2 life insurer since its $11 billion stock market debut in April, and is another deal for Australia's $1.2 trillion wealth management sector, which is growing thanks to compulsory private pension schemes.

While Dai-ichi did not raise any money through its IPO, it said it would use it as a springboard to push into overseas markets to address concerns about its growth prospects in Japan, where the population is shrinking.

It will pay A$4.00 per share for all the shares it does not own in Tower Australia, a 47 percent premium over Tower's latest closing price. Dai-ichi is currently the biggest shareholder in the midsized life insurer, with a 29 percent stake.

"This is a positive move," said Ryosuke Okazaki, chief investment officer at ITC Investment Partners in Tokyo.

"Top management is being decisive and if it did not take steps like this there wouldn't have been any point to it becoming a listed company."

The buyout ranks as the Japan's third biggest insurance acquisition after Tokio Marine Holdings, Japan's No. 2 non-life insurer, spent $4.7 billion to buy U.S. insurer Philadelphia Consolidated and 442 million pounds to buy Lloyd's of London insurer Kiln Plc.

Overseas acquisitions made by Japanese insurers hit a peak in 2008 with 547 billion yen worth of deals struck. This year there has been 109 billion yen worth of transactions made.

Dai-ichi said the deal will increase the amount of net profit derived from overseas to 9 percent from 3 percent. It had 55.6 billion yen net profit for the year ended March 2010.

Dai-ichi also has minority stakes in Ocean Life Insurance Co in Thailand and Star Union Dai-ichi Life Insurance Co in India.

AUSTRALIAN MARKET

Australia's wealth management sector is the world's fourth-largest and has recently seen much M&A activity, with Australian wealth manager AMP and French insurer AXA SA launching a new $13.1 billion-plus bid for AXA Asia Pacific last month.

Private equity firm Kohlberg Kravis Roberts & Co offered $1.7 billion for wealth manager Perpetual, although the deal fell through this month.

Tower Australia's principal activities include life insurance, funds management, superannuation, financial planning, and investment management.

Dai-ichi's shares rose 2.1 percent to 133,600 yen in Tokyo after the Nikkei business daily first reported the deal earlier on Tuesday.

"The recent European proposals for reform of the economic governance of the euro area go in the right direction, but are not ambitious enough to ensure a healthy and efficient functioning of monetary union," Mersch said in a statement.

Firstly, excessive deficit procedures should have a faster trigger, with sanctions applied early and "quasi-automatically," he said. Secondly, greater emphasis should be put on national debt levels, he added.

The sovereign debt crisis had its roots in the fact that euro zone countries were unable to properly monitor each others' economic policy, and procedures should be put in place to correct that, Mersch added.

"Beyond these new mechanisms, whose activation should also occur only in exceptional circumstances and under strict compliance, it is crucial that states should learn from this crisis by intensifying their efforts to consolidate," Mersch said in a new year statement as president of Luxembourg's central bank.

(Reporting by Robert-Jan Bartunek and Pete Harrison)