Home Sales and Consumer Confidence Slide

The economy provided a sobering reminder Tuesday that consumers are jittery and the housing market is still a major cloud over growth.
In February, U.S. home prices fell their steepest in almost 15 years. Sales of existing homes plunged in March by the largest amount in nearly two decades. And consumer confidence in April crumbled to its lowest since August. It was a hat trick of bad economic data that analysts said would trap the Federal Reserve between inflation pressures and tepid growth. "The Fed is still talking tough on inflation but I think they are watching the slowdown in the economy. They would not want to raise rates if the economy remains weak," said Gary Thayer, chief economist at AG Edwards & Sons Inc. "We are not out of the woods on housing. And consumers are not feeling good about the economy. I don't think we will see a lot of spending on the part of consumers," he said. The poor economic data also offset the positive feeling investors were getting about better-than-expected first-quarterly reports from the likes of International Business Machines Corp. and DuPont Co. The Dow Jones industrial average slipped in early trading before recovering in the afternoon, adding 34.05, or 0.26 percent, to 12,953.46.