NEW YORK -- Americans' confidence in the economy stayed stuck in gloomy territory in October, with Wall Street's gains in recent months not boosting spirits much.

Coaxing shoppers out of their shells will be the major challenge for retailers heading into the holiday season. That could mean they'll be continuing to push big discounts.

The confidence report, released Tuesday by the Conference Board, comes in the face of a rebounding stock market. But many shoppers, grappling with weak job prospects and a renewed slide in home prices, see their personal financial health tied more to Main Street, not Wall Street. Another report, released Tuesday from a key home pricing index, showed home prices are weakening across the country.

"The things that matter most to consumers are either not improving or worsening," said Mark Vitner, an economist at Wells Fargo. "We are definitely going to see a heavily promotional holiday shopping season."

The Conference Board, a private research group, said its Consumer Confidence Index rose to 50.2 from a revised 48.6 in September. Economists surveyed by Thomson Reuters expected 49.2.

September's reading was the index's lowest point since February.

An index of 90 indicates a healthy economy. That hasn't been approached since the recession began in December 2007.

Economists watch confidence closely because consumer spending accounts for about 70 percent of U.S. economic activity and is critical to a strong rebound.

The index, which measures how Americans feel about business conditions, the job market and the next six months, has recovered only fitfully since hitting an all-time low of 25.3 in February 2009.

The Dow Jones industrial average fell about 10 points to 11153.91 after rising Monday to its highest close since late April. For the year, the Dow is up 7.1 percent.

But while the stock market has been on an upward path, confidence has been moving sideways. In October 2009, the index stood at 48.7. Since then, it has mostly hovered in a tight range between the mid-40s and the high 50s. May 2010 proved to be the only exception at 62.7, but even that is weak.

One component of the index, which measures how shoppers feel about the economy right now and is most closely correlated with consumer spending, is actually even lower than it was two years ago heading into the presidential election. The measure increased slightly to 23.9 in October from 23.3. Back in October 2008, it was 43.5.

The index's other component, which assesses consumers' outlook over the next six months, improved to 67.8 in September from 65.5.

But Wells Fargo's Vitner said he's not comforted by rising expectations because in this case, it means that things are so bad, the future has to look better. Such lack of confidence will weigh heavily on the Nov. 2 elections, when voters worried about increasing deficits and the economy will decide whether to keep Democrats in power in Congress.

While fears have eased that the economy isn't heading toward a double-dip recession, companies aren't making a lot of job offers. In fact, in September, unemployment remained stuck at 9.6 percent, but the Labor Department's job report also showed a net loss of 95,000 jobs because of rampant layoffs of teachers and other local government workers that offset hiring in the private sector.

The Conference Board survey, based on a random survey mailed to 5,000 households from Oct. 1 to Oct. 19, underscored worries about job prospects.

Meanwhile, the outlook for housing is weaker. The Standard & Poor's/Case-Shiller 20-city home index showed that home prices are falling around the country, even in metro areas that were showing strength earlier in the year. The index fell 0.2 percent in August from July. Fifteen of the cities showed monthly price declines. Prices are expected to drop further in the coming months.

Home prices had risen in many markets from April through July. But those increases were mostly fueled by government tax credits, which have expired. Now that the peak buying season is over, foreclosures, job concerns and weak demand from buyers are pushing prices down.

Corporate earnings reports show the uneven pace of the recovery. The affluent appear to be recovering faster than everyone else.

"In general, consumers are cautious, but they are less pessimistic than they were a year ago and they are spending more in the category than they did a year ago," Lew Frankfort, CEO of Coach Inc., said in a phone interview Tuesday. The luxury handbag maker reported a 34 percent in net income and sounded a positive holiday tone.

Cruise operator Royal Caribbean International's Chief Financial Officer Brian Rice told investors Tuesday that demand is gradually improving, with customer deposits currently running 20 percent higher than a year ago. But consumers are booking closer to sailing dates, reflecting their cautious behavior.

--------

AP Real Estate Reporter Alan Zibel in Washington, and AP Retail Writers Mae Anderson and Michelle Chapman in New York contributed to this report.