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Stocks were eking out small gains Tuesday on mixed economic news. Consumer confidence surged to an eight-month high, but home prices dropped in major cities. Sears plummeted after reporting that it would close more than 100 stores around the country.

In the latest sign of a bumpy recovery in the housing market, home prices fell in 19 of the 20 cities tracked by the Standard & Poor’s/Case-Shiller index. Atlanta, Detroit and Minneapolis posted the biggest declines. Prices in Atlanta and Las Vegas fell to their lowest points since the housing crisis began.

That report dampened investors’ enthusiasm about a jump in consumer confidence to the highest level since April. The New York-based Conference Board reported that its Consumer Confidence Index rose almost 10 points to 64.5 in December. Economists watch the numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity.

Henry Herrmann, chief executive officer at the investment management firm Waddell & Reed, said the increase reflected the fact that more jobs have been created in recent weeks, which will likely lead to “a more sustained” economic recovery.

“If job creation will come with wage improvement in the coming weeks, it will boost confidence further,” Herrmann said.

The Dow Jones industrial average was up 17 points at 12,311 as of noon Eastern. The S&P 500 was up less than 2 points at 1,267. The Nasdaq composite was off 7 points at 2,626.

The stock market was closed Monday in observance of Christmas. Stocks are expected to trade within a narrow range this week as trading remains light.

The Dow average closed at a five-month high last week after a run of strong economic data in the U.S. However analysts expect any market gains to be tempered by worries over the European debt crisis.

Italy’s borrowing costs rose Tuesday, reflecting investor anxiety. The yield on the country’s ten-year bonds hit 7 percent again, a level that is considered unsustainable in the long run. Greece, Ireland and Portugal had to seek relief from their lenders after their own borrowing costs rose to that level.

Italy is the euro zone’s third-largest economy and is considered too big to bail out. Mario Monti, the country’s new premier, got parliamentary approval last week for a big austerity package that is intended to save the country from financial disaster.

Markets have grown increasingly fearful over the past few months that Italy will find it difficult to pay off its massive debts, which stand at around $2.5 trillion.

In corporate news:

_ Sears Holding Corp. plunged 23 percent to $35.04, the most in the S&P 500, after the retailer announced plans to close between 100 and 120 Sears and Kmart stores after poor sales during the holidays, the most crucial time of year for retailers.

_ U.S. oil and gas explorer Endeavour International Corp. rose 15 percent to $7.40 after the company announced an agreement to buy ConocoPhillips’ interest in three U.K. oil fields in the Central North Sea for $330 million.

_ MetLife Inc. rose 1 percent to $31.61 after saying it will sell its U.S. retail deposit business to GE Capital as it moves away from being a bank holding company.

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Moody’s Investors Service on Friday downgraded Ireland’s government debt ratings to junk status, saying it believes Ireland will need further rounds of financing when the current European Union and the International Monetary Fund support ends in 2013.

The ratings agency cut Ireland’s bond ratings to “Ba1″ from “Baa3,” and said the outlook on the ratings remains negative.

Moody’s credits Ireland with a strong commitment to fiscal consolidation, but notes that implementation risks remain significant with its weak economy.

The analysts say the EU may require private sector creditor participation as a precondition for such additional support, a negative for holders of distressed government debt.

Ireland’s short-term issuer rating also was lowered by one notch to “Non-prime” from “Prime-3.”

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President Barack Obama says back-channel talks with congressional leaders last weekend have produced new progress in advance of a White House session Thursday on deficit reduction.

The president is siding with House Speaker John Boehner in insisting that negotiators resist the temptation to “kick the can down the road” and settle for a makeshift, short-term solution to stave off a first-ever U.S. default next month.

At issue is the need to raise the government’s so-called debt limit to avoid a default on its obligations to bondholders and Social Security beneficiaries. Republicans want deficit cuts in the range of at least $2.4 trillion over 10 years to offset the amount of new government borrowing needed simply to avoid another vote before 2013.

Obama met with Boehner on Sunday, the first session since Republicans last month abandoned negotiations being led by Vice President Joe Biden.

The Biden talks had produced a series of tentative understandings on potential spending cuts totaling at least $1.6 trillion under administration math and $2 trillion or more under GOP math. But negotiators say a true agreement on those cuts _ to day-to-day agency operating budgets, defense, federal pensions and farm subsidies, among other things _ would require further sacrifice in the political priorities of Democrats and Republicans alike.

The administration says that if the government’s borrowing authority is not increased by Aug. 2, the U.S. will face its first default ever, potentially throwing financial markets into turmoil.

Obama isn’t calling for increases in tax rates. On Tuesday, the president urged Republicans to agree to eliminate “certain tax breaks and deductions for the wealthiest of Americans.” The White House is pressing for the repeal of tax breaks enjoyed by the oil and natural gas industry and limits on deductions claimed by people in the 35 percent tax bracket.

On Tuesday, Boehner attacked the latter proposal as an assault on small businesses but was subdued on questions like oil and gas subsidies or a much-publicized tax provision that gives favorable treatment to companies that buy corporate jets business cards.

“We’re not dealing just with talking points about corporate jets or other `loopholes,’” Boehner, R-Ohio, said. “The legislation the president has asked for, which would increase taxes on small businesses and destroy more American jobs, cannot pass the House, as I have stated repeatedly.”

In his remarks Tuesday, Obama said he strongly opposes a stopgap, short-term debt-limit increase, as suggested by some lawmakers.

“We’ve made progress, and I believe that greater progress is within sight, but I don’t want to fool anybody. We still have to work through some real differences,” the president said.

Obama’s tone was less partisan than at a news conference last week, as were the responses from Capitol Hill Republicans.

“I’m pleased the president stated today that we need to address the big, long-term challenges facing our country,” Boehner said in a statement.

Obama said Republican and Democratic leaders from the House and Senate were invited to meet on the issue Thursday at the White House. That would bring the top eight lawmakers together with Obama, Biden and top administration financial officials.

“It’s my hope that everybody’s going to leave their ultimatums at the door, that we’ll all leave our political rhetoric at the door,” Obama said.

In the Senate on Tuesday, Majority Leader Harry Reid, D-Nev., postponed a test vote on a Libya resolution amid increasing opposition from Republican lawmakers who insisted they should be working on financial security, not national security. Several Republican senators had indicated they would oppose using the week to debate the Libya measure.

Reid replaced the Libya measure with a nonbinding resolution calling on millionaires to pay a bigger share of the sacrifices needed to wrestle the deficit under control _ hardly a move that would eclipse any progress made at the White House.

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Nike Inc.’s fourth-quarter net profit rose 14 percent to beat expectations as the company’s sales improved around the globe.

The world’s largest athletic shoe company reported Monday that it earned $594 million, or $1.24 per share, for the quarter. That’s up from the $522 million, or $1.06 per share, it earned in the same quarter last year.

Nike’s total revenue rose 14 percent to $5.77 billion

The results handily beat the $1.16 per share on revenue of $5.53 that analysts polled by FactSet were anticipating. The news sent shares of the company, based in Beaverton, Ore., soaring in after-hours trading.

Nike had warned investors that higher costs would cut into its profit margins. The company, like many of its peers, is dealing with higher costs for materials, labor and freight.

The company was able to make up for the rising costs with higher sales volume. Revenue improved in every market except Japan during the quarter.

“We delivered exceptional results in extraordinary times,” Mark Parker, Nike’s CEO said.

For the full year, Nike earned $2.13 billion, or $4.39per share, compared with $1.9 billion, or $3.86 per share, for the prior year.

Shares of Nike jumped $3.15, nearly 4 percent, to $81.62 in after-hours trading.

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British Prime Minister David Cameron insists the NATO-led air campaign in Libya still has strong support, despite recent criticism.

Cameron told lawmakers in Parliament on Wednesday that the coalition involved in the mission is “holding strong” and increasing the pressure on Moammar Gadhafi to quit power.

Cameron’s comments follow concern from the outgoing head of the Arab League, Amr Moussa, over civilian casualties and questions from some British military chiefs about the impact on stretched resources.

Italian Foreign Minister Franco Frattini has called for a pause in the campaign to allow access for humanitarian aid.

Cameron’s office said any temporary cease-fire must not allow Gadhafi’s forces to regroup and launch new offensives.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

TRIPOLI, Libya (AP) _ NATO warplanes resumed daytime strikes on targets in the Libyan capital Wednesday as alliance member Italy called for the “immediate suspension” of hostilities in the North African nation.

At least two explosions shook Tripoli before noon as fighter jets soared overhead. It wasn’t immediately clear what had been hit or if there were casualties.

In Rome, the Italian foreign minister called for a halt in fighting so aid corridors could be set up.

Franco Frattini said “the humanitarian end of military operations is essential to allow for immediate aid,” including in areas around Tripoli and the rebel stronghold of Misrata.

Frattini also expressed concern over civilian casualties, referring to “dramatic errors” in the bombing campaign.

“With regard to NATO, it is opportune to ask for more detailed information on results” in the attacks, he said in comments to a parliamentary commission that were carried by Italian news agencies.

Italy is Libya’s former colonial ruler and continues to maintain strong commercial ties to the country free credit report and score.

NATO’s daily airstrikes are coming under increased criticism by Libyan leader Moammar Gadhafi’s government, which accuses the alliance of targeting civilians.

NATO acknowledged it may have struck a residential building and caused civilian casualties in Tripoli earlier this week. It also hammered a compound belonging to a close Gadhafi associate and killed what Libya says was 15 civilians, including at least three children. NATO said that target was a “command and control” center.

A coalition including France, Britain and the United States began striking Libyan leader Moammar Gadhafi’s forces under a United Nations resolution to protect civilians on March 19. NATO assumed control of the air campaign over Libya on March 31. It’s joined by a number of Arab allies.

Rebels fighting Gadhafi’s forces have taken over much of the eastern half of the country. They also control pockets in the west, including the vital port city of Misrata, about 125 miles (200 kilometers) from Tripoli.

Rebel forces facing barrages of rockets and mortars launched by government troops are trying to push their front line forward from Misrata toward the capital. But an increased number of rockets have been hitting closer to Misrata this week, raising fears among rebels of a renewed push by Gadhafi’s forces toward the city.

On Wednesday, China told Libyan rebel leader Mahmoud Jibril that his Transitional National Council represents a growing segment of the Libyan public and is becoming a major political force in the country.

The comments by Chinese Foreign Minister Yang Jiechi were the country’s strongest endorsement yet of the rebel council. Beijing, an important trading partner with Libya, says it isn’t taking sides in the more than 4-month-old conflict.

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Internet minders voted Monday to allow virtually unlimited new domain names based on themes as varied as company brands, entertainment and political causes, in the system’s biggest shake-up since it started 26 years ago.

Groups able to pay the $185,000 application can petition next year for new updates to “.com” and “.net” with website suffixes using nearly any word in any language, including in Arabic, Chinese and other scripts, the Internet Corporation for Assigned Names and Numbers decided at a meeting in Singapore.

“This is the start of a whole new phase for the Internet,” said Peter Dengate Thrush, chairman of ICANN’s board of directors. “Unless there is a good reason to restrain it, innovation should be allowed to run free.”

ICANN’s decision culminates six years of negotiations and is the biggest change to the system since “.com” made its debut in 1984. The expansion plan had been delayed largely because of concerns that new suffixes could infringe on trademarks and copyrights.

High-profile entertainment, consumer goods and financial services companies will likely be among the first to apply for their own domain name in a bid to protect their brands, experts said.

“It will allow corporations to better take control of their brands,” said Theo Hnarakis, chief executive of Melbourne IT, which manages online brands for clients such as Volvo, LEGO and GlaxoSmithKline. “For example, .apple or .ipad would take customers right to those products.”

The surge in domains should help alleviate some of the overlap of names in the most popular suffixes, especially “.com”, which has 94 million sites registered.

More than 300 suffixes are available today, the bulk of them country-specific codes, such as “.jp” for Japan and “.fr” for France. Those are typically restricted to groups or individuals with a presence in the countries. Only a handful are open for general use worldwide.

In March, ICANN approved “.xxx” for pornography, but some porn sites have declined to adopt the suffix, fearing it will make it easier for governments to ban them loan for people with bad credit. Conservative groups opposed the “.xxx” name too, arguing it could attract children to adult sites.

Analysts said they expect between 500 to 1,000 new domain names, mostly companies and products, but also cities and generic names such as “.bank” or “.hotel.” Groups have formed to back “.sport” for sporting sites, and two conservationist groups separately are seeking the right to operate an “.eco” suffix.

ICANN plans to auction off domains if multiple parties have legitimate claims. However, it expects companies will likely strike deals among themselves to avoid a public auction.

“I think we’ll see much more of that going on than see auctions generating circuses,” Dengate Thrush said. “But there is that prospect that there will be a couple of identical applicants and applications.”

The application process is arduous _ the fee is $185,000 and the guidebook is 360 pages _ and meant to prevent scammers from grabbing valuable domain names. ICANN will receive applications for new domains for 90 days beginning Jan. 12.

“It’s a significant undertaking. We’re calling it the Olympic bid,” said Adrian Kinderis, chief executive of AusRegistry International, which helps companies to register domains and manages names such as “.au” for Australia.

“But it’s worth it for corporations that have suffered from things like trademark infringement, and can now carve out a niche on the internet,” Kinderis said.

ICANN said it has set aside up to $2 million to assist applicants from developing countries.

“The board’s very enthusiastic about providing support for applicants from developing areas where the evaluation fee or access to technical expertise might be somewhat of a bar,” ICANN senior vice president Kurt Pritz told reporters after the meeting.

ICANN said in a statement that it will mount a global publicity campaign to raise awareness of the opportunities of new domain names.

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The United Mine Workers labor union says its members have ratified a new 5 1/2-year deal with coal companies in a nationwide vote.

The union said in a Friday news release from Triangle, Va., that 70 percent voted in favor of the collective bargaining agreement with the Bituminous Coal Operators Association.

UMW International President Cecil E. Roberts said in the statement that the members will receive the largest pay increase in the union’s 121-year-history. The union had said earlier that members would get a $6 an hour raise over the duration of the contract Payday advance. They would average about $30 an hour by 2016.

The Bituminous Coal Operators represent mainly the unionized subsidiaries of Canonsburg, Pa.-based Consol Energy. But the pension language of the deal affects more companies and thousands of miners.

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Builders broke ground on more new homes in May, but not enough to signal a recovery in the troubled housing market.

New-home construction rose 3.5 percent from April to a seasonally adjusted annual rate of 560,000 units per year, the Commerce Department said Thursday.

Economists say the pace of construction is far below the 1.2 million new homes per year that must be built to sustain a healthy housing market. Many credit-strapped builders are struggling to compete with low-priced foreclosures.

Housing permits, a gauge of future construction, rose 8.7 percent last month, to the highest level since December. But apartment and condominium construction accounted for a large portion of that increase. Permits for buildings with five or more housing units jumped to its highest point since October 2008, well before a second wave of foreclosures knocked home prices down further.

The number of single-family homes started in May rose a modest 3.7 percent. It’s at its highest point since January. But the construction pace of single-family homes, which accounts for about 80 percent of all residential construction, is well below the 2010 rate. The last two years were the worst for housing starts on records going back to 1959.

Fewer new homes mean fewer jobs. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

Builders are struggling to compete with millions of foreclosures that are forcing down prices for re-sold homes. The median price of a new home is about 34 percent higher than the median price for a re-sale. That’s more than twice the markup in healthy housing markets.

“The high premium is expected to continue to sway potential buyers to existing homes and away from new ones,” said Christos Shiamptanis, economist at TD Economics.

In some cities, prices are half of what they were before the housing market collapsed in 2006 and 2007. Tougher lending standards have made home loans hard to come by. Many would-be buyers who could qualify for loans are worried prices will fall further. Others are reluctant to put their own homes up for sale when prices are dropping.

Home prices in big metro areas have sunk to their lowest since 2002, the Standard & Poor’s/Case-Shiller 20-city index showed last month. Since the bubble burst, prices have fallen more than they did during the Great Depression. It took 19 years for the housing market to regain its losses after the Depression ended.

And this time, prices aren’t expected to come back up anytime soon.

Home building was uneven across the country: It fell 3.3 and 4.1 percent last month in the Northeast and Midwest, respectively, but rose 1.5 percent and 18.1 percent in the South and West. The big gains in the West were largely due to increased apartment construction.

Many foreclosures have been delayed as regulators and state attorneys general work out the details of new lending requirements and penalties for banks. Until those rules are finished, banks won’t ease their stricter lending rules. Most private lenders are requiring 20 percent down payments.

Few people think it makes sense to put their home on the market in this environment. Roughly 92 percent of homeowners say it’s a bad time to sell, according to the latest Thomson Reuters/University of Michigan index of consumer sentiment.

In some badly hit areas, such as Phoenix, Tampa and Las Vegas, a housing recovery could take years.

The homebuilders’ trade group said Wednesday that its survey of homebuilder sentiment fell to 13 _ the lowest level since September. Any reading below 50 indicates negative sentiment about the market. The index hasn’t reached that level since April 2006.

Builders are not hopeful for a turnaround this year. An index that gauges sales expectations over the next six months fell in June to its lowest level on records dating back to 1985.

The weak housing market is weighing on the overall economic recovery.

But housing helps the broader economy in other ways.

Home equity accounts for most of the wealth of typical households. Equity is nearing its lowest point on records going back to the end of World War II. When prices fall, state and local property tax collections dry up and people spend less. Consumer spending fuels about 70 percent of the U.S. economy, more than any other industrialized nation.

In past modern-day recessions, housing accounted for 15 to 20 percent of overall economic growth. This time around, between 2009 and 2010, housing contributed just 4 percent to the economy.

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