U.S. consumers are going to continue to feel pain until housing prices stabilize, even though global growth remains mostly strong, General Electric Chairman Jeff Immelt said.

A plan to rescue Fannie Mae and Freddie Mac could cost U.S. taxpayers $25 billion, congressional budget analysts said, as Congress worked to complete sweeping housing market legislation.

Stocks advanced, buoyed by a sharp drop in oil prices, but technology stocks dragged on the market after disappointing earnings from Apple and Texas Instruments.

To fend off inflation, the Federal Reserve probably will need to boost interest rates "sooner rather than later" even if employment and financial conditions haven't revived, the president of the Federal Reserve Bank of Philadelphia said Tuesday.

Treasury Secretary Henry Paulson said America's housing market could turn a corner and begin recovering within months, but it will take longer to resolve all housing-related problems.

Stocks dropped at the open, crushed by a wave of disappointing earnings reports both after the close Monday and before the bell Tuesday.

Democrats and Republicans queasy about a federal rescue of mortgage giants Fannie Mae and Freddie Mac are coalescing around the idea of letting the government slap limits on the multimillion-dollar pay packages of their executives.

Jill Smart, an Accenture executive, was skeptical the first time she stepped into her firm’s new videoconferencing room in Chicago for a meeting with a group of colleagues in London. But the videoconferencing technology, known as telepresence, delivered an experience so lifelike, Ms. Smart recalled, that “10 minutes into it, you forget you are not in the room with them,” The New York Times reported.

A number of major U.S. companies who rely on consumer spending warned about their results on Monday evening, including credit card company American Express, Macintosh computer and iPod maker Apple and cruise ship operator Royal Caribbean Cruises.

The dollar rallied sharply on Tuesday, boosted by a steep drop in oil prices and comments from a Federal Reserve official suggesting that U.S. interest rates may have to rise even before financial markets recover.

U.S. parents with school-aged children will spend more on back-to-school merchandise this year, helped by tax rebates, but spending for back-to-college will fall as students struggle with the spike in gas prices, according to a survey released Tuesday.

The index of leading U.S. economic indicators slipped 0.1 percent in June, showing that the limping economy is still far from being on the mend, the Conference Board reported.

As losses mount at American banks and the pain of the credit crisis spreads from housing and finance to the broader economy, many small companies complain it is increasingly difficult to obtain loans.

The U.S. economy may have avoided a recession but will grow below trend for some time as firms face higher prices for a range of goods that will cut into profits, according to a panel of economists surveyed.