Two pillars of the economy – consumer confidence and the housing market – sent off warning signs on Tuesday that could mean lower spending during the critical fall shopping season, particularly if the labor market weakens.

Both pieces of the economic puzzle dropped into a market that is worried about inflation, interest rates and economic growth ahead of a two-day meeting of the Federal Reserve that begins Wednesday. The Fed is expected to keep interest rates steady, but investors are watching for clues about future moves.

In midmorning trading, the Dow Jones industrial average rose only slightly as investors were unnerved about the larger-than-expected drop in consumer sentiment.

The New York-based Conference Board said that its Consumer Confidence Index fell almost 5 points to 103.9, down from a revised 108.5 in May, reaching the lowest level since August 2006 when the reading was 100.2. Analysts had expected a reading of 106.

New home sales also dropped in May for the fourth time in the past five months, according to government figures, in another sign of continued weakness in the housing market. (AP)