Bank stocks fell Tuesday on economic signals that indicated the slowdown sought by the Federal Reserve may be late in arriving.

U.S. consumer confidence surged to a 28-year high in May, and home resales in April remained on a pace to top four million for the second consecutive year.

Bonds extended earlier losses, and the stock market initially fell after the reports' release, which ignited fears of a rate hike by the Fed later this year.

Consumer confidence rose to a greater-than-expected 127.1 in May, the Conference Board said, up from April's revised estimate of 116.8. That's the highest since August 1969 when the index set its record, 131.7.

Meanwhile, U.S. home resales fell a greater-than-expected 2.4% in April, according to the National Association of Realtors. Still, that translated into an annual rate of 4.06 million-close to the record 1996 sales total of 4.09 million.

The benchmark 30-year U.S. Treasury bond fell 19/32 by late morning, pushing up its yield almost 5 basis points, to 7.03%.

The Dow Jones industrial average closed the day up 37.50 points, at 7,383.41, but rate-sensitive banking stocks continued to fall on the news. By the close, shares of Citicorp had fallen $4.375, to $113.50; Mellon Bank Corp. $2.25, to $86.625; and BankBoston Corp., $1.25, to $73.625.

"There's no doubt that unemployment at 4.9% and the stock market at record highs were the ingredients for this high consumer confidence," said Kevin Flanagan, money market economist at Dean Witter Reynolds Inc. in New York. "This indicates consumers will continue to spend, which will keep pressure on the Federal Reserve to raise rates again."

The home sales figures represent actual closings, which lag contract signings by a few months. Analysts surveyed by Bloomberg News had expected a 1% decline in home sales, and they were forecasting a May consumer confidence number of 117.0.

"Consumers are not only upbeat about the current state of business activity but believe the economy will continue to expand over the next six months," said Lynn Franco, associate director of the Conference Board, a New York-based research group.

The Conference Board said its index for gauging consumer expectations for the next half year rose to 110.3 this month from a revised 103.2 for April while a third index, tracking consumers' assessment of current conditions, jumped to 152.2 from a revised 141.6.

The Conference Board said fewer respondents than last month expect their incomes to rise during the next six months. The index showing expectations for higher incomes slipped to 22.5 in May from 23.6 in April. The indexes measuring plans to buy a home, automobile, or major appliance in the next six months all fell.

The Conference Board uses 1985 as a base year, with the index at 100. About 5,000 households are surveyed on the economy, jobs, and incomes.

After rising as high as 120.7 in February 1989, the confidence index touched bottom at 47.3 in February 1992 before starting its most recent ascent. The housing report showed that resales rose 3.1% in the Northeast, to a 660,000 annual rate; fell 3.9% in the South, to 1.47 million; fell 6.1% in the West, to 920,000; and were unchanged in the Midwest, at 1.01 million.

During March, resales decreased a revised 1.7%, to an annual rate of 4.16 million. The March total was originally estimated as a 2.8% drop from the month earlier. In 1996, existing-home sales exceeded four million for the first time ever.

The first three months of this year set an even faster pace. Experts differ on whether home resales-and the housing market as a whole-can remain close to that record or whether demand for houses will slow as the year progresses.

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