Associated Press

WASHINGTON - Home builders took a breather in June, sending housing construction down to its lowest level in just over a year. It was another sign that the economy slowed last month.

The number of housing projects launched by builders clocked in at a seasonally adjusted annual rate of 1.80 million units, an 8.5 percent drop from May's level, the Commerce Department reported Tuesday.

Although the 1.80 million pace was the lowest since May 2003 and was weaker than economists expected, it still represented a respectable level of activity, analysts said.

Housing construction in May rose by 0.4 percent from the previous month, according to revised figures. That turned out to be stronger than the decline previously estimated.

Tuesday's report is consistent with other economic data — including retail sales, the nation's employment situation and industrial production — that suggested the economy hit a rough patch in June.

Fed Chairman Alan Greenspan, in an appearance Tuesday on Capitol Hill, offered a fairly upbeat assessment of the economy and suggested the softness seen in recent consumer spending "should prove short-lived."

On Wall Street, Greenspan's comments lifted stocks only moderately.

The Dow Jones industrial average rose 55.01, or 0.6 percent, to 10,149.07.

Broader stock indicators were markedly higher. The Standard & Poor's 500 index was up 7.77, or 0.7 percent, at 1,108.67, while the Nasdaq composite index advanced 33.24, or 1.8 percent, to 1,917.07.

Advancing issues outnumbered decliners by about 3-to-2 on the New York Stock Exchange, where preliminary consolidated volume came to 1.76 billion shares, compared with 1.6 billion on Monday.

The Russell 2000 index of smaller companies was up 9.46, or 1.7 percent, at 564.19.

The price of the benchmark 10-year Treasury note dropped point or $6.88 per $1,000 in face value from Monday. Its yield, which moves in the opposite direction, rose to 4.44 percent from 4.36 percent.

Late Tuesday in New York, the euro was trading at $1.2335, below $1.2439 late Monday. The dollar was at 108.57 yen, up from 108.23

Japan's Nikkei stock average closed down 1.55 percent. Britain's FTSE 100 closed up 0.4 percent, France's CAC-40 gained 0.4 percent for the session and Germany's DAX index climbed 0.7.

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