* U.S. stocks ease, bonds shed losses on economic data
* Investors take profits after previous Monday's rally
* Dollar off lows vs yen after comments by Japan's Fujii
(Updates with close of U.S. markets)
By Manuela Badawy
NEW YORK, Sept 29 (Reuters) - Stocks slipped on Tuesday
after a drop in U.S. consumer confidence made investors retreat
to the sidelines, while the U.S. dollar firmed against the yen,
rallying from an eight-month low plumbed the previous day.
The unexpected fall in consumer confidence in September, a
possible precursor to slower growth, reflected worries about
the worst job market in 26 years.
Despite news on Tuesday of a rise in U.S. housing prices in
July, the weakness of the consumer sector bodes ill for the
year's end, traditionally a period of spending and shopping.
For more on the consumer confidence and house price
reports, click on [].
Consumer spending accounts for some two-thirds of U.S.
economic activity, so the weak confidence level suggests it
could take a long time before consumers contribute to growth.
After a U.S. stock market rally on Monday, investors took
the data as an excuse to pause and take some profits.
"Investors seem to be looking for an opportunity to take
profits and the consumer confidence numbers are the latest
excuse to take a little bit off the table," said Carmine
Grigoli, chief U.S. investment strategist in the equity
division at Mizuho Securities USA Inc in New York.
The Dow Jones industrial average <> fell 0.48 percent
on the day, while the Standard & Poor's 500 Index <.SPX> eased
0.22 percent and the Nasdaq Composite Index <> shed 0.31
percent.
MSCI world equity index <.MIWD00000PUS> was almost
unchanged, while the FTSEurofirst 300 index of leading European
shares <> edged up 0.08 percent.
House prices in 20 U.S. metropolitan areas rose 1.6 percent
in July, suggesting the domestic housing market was bottoming
out, which in turn boosted home construction stocks.
"The housing market does seem to have found a base and
prices seem to be in recovery, which is quite significant,"
said David Sloan, Economist at 4CAST Ltd in New York.
U.S. government bonds, a safe-haven asset, trimmed earlier
losses after the weak economic data was released.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 5/32 in price, with the yield at 3.30 percent.
The dollar gained against the yen after Japanese Finance
Minister Hirohisa Fujii appeared to backtrack on comments
suggesting he was comfortable with the yen's recent strength,
adding he would not rule out taking action if currency moves
were sharp and irregular. []
In his initial remarks after being appointed finance
minister, Fujii had said he was comfortable with a strong yen
given that the government intends to boost domestic
consumption, prompting investors to buy the Japanese currency.
Crude oil prices <CLc1> slipped following the dollar's rise
and on concerns about demand ahead of the U.S. government's
weekly inventory report published on Wednesdays.
Oil fell 13 cents, or 0.19 percent, to $66.71 a barrel.
The dollar rose against a basket of major trading-partner
currencies, with the U.S. Dollar Index <.DXY> up 0.05 percent
at 77.090 from a previous session close of 77.051.
The euro <EUR=> was down 0.34 percent at $1.4570 from a
previous session close of $1.4619. The dollar <JPY=> was up
0.65 percent at 90.18 yen from a previous close of 89.60.
Japan's benchmark Nikkei stock index <> rose 0.9
percent on Tuesday after sliding 2.5 percent the previous day
to its lowest close since July 24.
(Additional reporting by Rodrigo Campos, Chris Reese and
Burton Frierson; Editing by James Dalgleish)
