(Reuters) - Housing starts fell more than expected in August as groundbreaking for both single-family and multi-family units dropped, suggesting the economy will not get help from residential construction anytime soon. Housing starts decreased the most since April, down 5.0 percent to a seasonally adjusted annual rate of 571,000 units, the Commerce Department said on Tuesday.

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(Reuters) - The U.S. Federal Reserve opened a two-day meeting on Tuesday that is expected to end with a decision to stock up on longer-term Treasury notes in a bid to boost a fading economic recovery. With economic prospects fading dramatically after a damaging U.S. debt downgrade in August and an escalation of European financial turmoil, the Fed has made clear it is intent on taking further steps to lift growth.

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(Reuters) - Europe needs to "get its act together" and deal with its worsening sovereign debt crisis, the International Monetary Fund said on Tuesday, warning of the risk of severe global repercussions. The IMF said both Europe's debt woes and a painfully slow recovery in the United States could undermine global growth, and it warned that without action those economies could tip back into recession.

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(Reuters) - Standard & Poor's cut Italy's credit rating on Tuesday in a surprise move that increased strains on the debt-stressed euro zone, and the International Monetary Fund said Europe's leaders were failing to act decisively enough to resolve the crisis. Analysts said the one-notch downgrade, citing poor growth prospects and political instability, was ominous for the global economy and would add to mounting strains on European banks as talks to avoid a Greek default dragged on.

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(Reuters) - U.S. stocks fell sharply on Monday as renewed fears of a Greek debt default prompted investors to book some of last week's gains and turn to toward the safety of U.S. government debt. Energy and financial stocks were the day's top decliners. The S&P energy sector index .GSPE was off 3.1 percent as oil prices tumbled. The financial sector index .GSPF lost 2.6 percent following a steep decline in European banks on worries euro zone leaders won't be able to prevent a default by debt-stricken Greece.

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(Reuters) - International lenders told Greece on Monday it must shrink its public sector and improve tax collection to avoid default within weeks as investors spooked by political setbacks in Europe dumped risky euro zone assets. Hours before a telephone conference between the Greek Finance Minister and senior officials of the European Union and the International Monetary Fund, the IMF representative in Greece spelled out steps Athens must take to secure a vital 8 billion euro rescue payment next month.

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(Reuters) - UBS has kicked off an internal investigation into the catastrophic failure of its risk systems after rogue equity trades cost the Swiss bank $2.3 billion, raising the pressure on top management. UBS said its board of directors had set up a committee chaired by independent director David Sidwell, former chief financial officer at Morgan Stanley, to conduct an independent investigation into the trades and the bank's control systems.

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(Reuters) - As the U.S. economy slouches toward another recession and confidence in policymakers erodes, investors are coming to grips with the notion that the country may already be several years into a Japan-style lost decade. If so, the years ahead could be a very tough slog. U.S. households, unlike those in Japan, have higher debts and lower savings, while massive deficits have sapped political support for the type of robust government spending Japan relied upon.

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(Reuters) - The rogue trade disaster at UBS (UBSN.VX) will put pressure on the Swiss bank to accelerate plans to install a successor to Chief Executive Oswald Gruebel with a mission to dramatically slash the investment bank and renew the focus on wealth management. UBS has been grooming Sergio Ermotti, the former deputy chief executive of UniCredit (CRDI.MI) who joined the bank as Europe, Middle East and Africa chief in April, but until the scandal Gruebel had signaled that he was in no hurry to go.

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(Reuters) - Stocks pared early gains on Friday, with each of the major indexes turning negative, weighed down by weakness in financials. The Dow Jones industrial average .DJI gained 3.18 points, or 0.03 percent, to 11,436.36. The Standard & Poor's 500 Index .SPX lost 1.50 points, or 0.12 percent, to 1,207.61. The Nasdaq Composite Index .IXIC fell 1.03 points, or 0.04 percent, to 2,606.04.

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