The outlook for the home market dimmed this week as residential construction and mortgage applications fell and loan delinquencies reached a record. "I don't think the housing crisis is over," Mark Zandi, chief economist with Moody's Economy.com, said in a telephone interview. "I think we’re going to see another leg down."

New home sales may begin to pick up by the start of the so-called spring selling season, said Toll Brothers Inc., the largest U.S. luxury homebuilder. Existing house sales may take longer. Residential construction and property sales led the way out of the previous seven recessions going back to 1960, said David Berson, chief economist of PMI Group, the mortgage insurer in Walnut Creek, California.

Mortgage applications for home purchases fell to a 12-year low last week and foreclosures rose to record highs in the third quarter, according to reports from the Mortgage Bankers Association. An index measuring November homebuilder confidence came in lower than the median forecast of 45 economists this week. The Commerce Department on Nov. 18 said residential building dropped 11 percent in October to the lowest level since April’s all-time bottom.

The retailer, which has been struggling with its own brand issues as well as the recession, now has 12,500 employees compared with 18,000 at the end of 2006.

Earlier this month, Liz Claiborne posted a much wider-than-expected third-quarter loss, part of a run of losses the retailer has been experiencing. Chief Executive Bill McComb at that time stopped short of saying the company could return to profitability next year, but did indicate that new plans for the Liz namesake line, in which J.C. Penney Co. (JCP) will be the only U.S. department store to carry and expand the brand, should allow that part of the business to show earnings in 2010.

The U.S. art market appears to be on the mend. The major fall art auctions may not have sold everything on offer, but collectors showed a renewed willingness to bid up top examples of artists' work. Dealers also said inflation fears and expectations of higher bonuses in the financial markets stoked strong bidding.

New York's two chief auction houses, Sotheby's and Christie's International, brought in about $596 million combined from their semi annual sales of Impressionist, modern and contemporary art in the past two weeks. The total surpassed the houses' $409 million spring sales in May, a gain that could signal a measure of returning confidence in high-end art values.

The mood among collectors grew increasingly upbeat as the two weeks of sales progressed. At Sotheby's contemporary art sale Wednesday night, a Warhol silkscreen sold for $43.7 million, more than triple its high estimate. At a lively sale of modern and Impressionist art the week before at Sotheby's, an Alberto Giacometti sculpture sold for $19.3 million, well over its $12 million high estimate.

At Christie's, the results were more modest. The house fell short of presale estimates at its Impressionist sale and modern art evening sale Nov. 3, but it performed solidly at Tuesday's post-war and contemporary auction, led by a Peter Doig painting that sold for $10.1 million.

The recession may be over but companies that cater to consumers believe people are digging in for a long, frugal winter. That's why Clorox Co. is keeping the price steady on a new improved trash bag that grips the top of the garbage can. Clorox says it wants to highlight the bags' "greater value." Similarly, Campbell Soup Co. recently reduced the promoted price of its V8 beverages in some markets to 2 for $5 from 2 for $6. Burger King Holdings Inc. is selling double cheeseburgers for just a dollar.

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Pricing is perhaps where companies are finding consumers at their most grudging. Procter & Gamble Co. and other major makers of household staples, while vowing to resist price wars, say they plan to flood stores with enhanced versions of existing products. After nearly a decade of introducing increasingly expensive items, P&G's new products will span a wider range of prices, most notably at the low end. Among its efforts, P&G is paring the price of its Cheer detergent to reposition it as a "value" brand.

Beauty products maker Estee Lauder Cos. Inc. recently reported better-than-expected results in a sign that consumers are starting to boost discretionary spending. But Estee Lauder CEO Fabrizio Freda told analysts it's "prudent to remain cautious in our outlook" because of high unemployment and weak consumer sentiment. As a result, Mr. Freda said Estee Lauder's holiday gift sets will offer wider price ranges to give consumers greater choice.

Akiko Sayama re-examined her spending habits when the Tokyo staffing agency where she works cut its overtime budget. She lost more than $13,000 in annual pay, so one of the first things she did was curb her tastes for Louis Vuitton and PPR SA's Gucci. "I need to cut back where I can," said Sayama, 41, who lives in Saitama prefecture outside of Tokyo. "It's not like I lost my interest in luxury brands. I can't afford them."

Sayama is embracing a frugality that, along with a shrinking population and falling wages, is causing Japan's economy to contract by 5.7 percent this year, according to the median estimate of 17 economists compiled by Bloomberg. Luxury spending in the country could fall 14 percent to 19 billion euros ($28.1 billion) this year from a peak of 22 billion euros in 2005 and 2006, Boston-based consultant Bain & Co. said.

The worldwide luxury market is expected to shrink 8 percent to 153 billion euros this year, including a 16 percent decline in the Americas and an 8 percent drop in Europe. Yet spending in China, the world's most populous country, may grow 12 percent to 6.6 billion euros this year, compared with 5.9 billion euros last year, Bain said Oct. 19.

"Given the pace of economic growth, luxury-goods makers are starting to give up on Tokyo, as they shift their focus to other Asian markets like China and Singapore," said Naoki Iizuka, a senior economist at Mizuho Securities Co. in Tokyo. "The situation will remain severe here because more people are losing their interests in brands with the advent of cheaper, fast fashions."

Third quarter net sales at Children's Place Retail Stores Inc topped estimates at Wall Street as the retailer gained favor with thrifty shoppers, even as more expensive rival Gymboree Corp saw third-quarter sales miss the mark.

Kids apparel has been a weak link for many retailers this month, with Dillard's Inc., Kohl's Corp and Target Corp naming the segment among their worst performing categories.

Children's Place shares were up 8 percent in morning trade on Nasdaq, while Gymboree shares were down 7 percent.

Founded in 1951 by entrepreneur Achille Maramotti in Italy's Reggio Emilia, the group today counts some 23 lines, from Mara and Sportmax to Max & Co., Marina Rinaldi and Pennyblack, each with dedicated design teams and catering to different target customers.

The group counts 2,250 stores in 90 countries worldwide, all designed in-house. Exports account for about 45 percent of sales.

Sales at U.S. stores open at least a year rose 3 percent at Aeropostale, the U.S. teen retailer with more than 900 stores, trailing the 14 percent average of analysts' estimates compiled by Retail Metrics Inc. Comparable-store sales at American Eagle fell 5 percent, missing a 2 percent projected gain. Sales at Limited, the owner of the Victoria's Secret chain, dropped 4 percent, more than the 3.1 percent estimated decline.

October is a transitional month between the two largest selling seasons of the year: back-to-school and Christmas. U.S. retailers use the month to clear out fall merchandise and make room for holiday floor sets, according to Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics. "The teen apparel space was the biggest disappointment," Perkins said today in a telephone interview.

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Aeropostale, based in New York, fell $5.21, or 14 percent, to $32.82 at 11:29 a.m. in New York Stock Exchange composite trading. Pittsburgh-based American Eagle dropped $2.02, or 11 percent, to $15.84. Limited, of Columbus, Ohio, lost 8 cents to $17.70. Some department stores fared better than the specialty retailers. TJX Cos. and Ross Stores Inc., which both sell designer goods at discounted prices, reported sales gains. Chains including Saks Inc. and Nordstrom Inc. reported sales that topped estimates.

Some 31 percent of bars outside the Dublin area don't expect their venue to continue as a licensed premises after the current owner retires, the Drinks Industry Group of Ireland said today in a report on its Web site. Ireland has about 7,000 bars outside the capital, DIGI said.

Pub sales are falling as unemployment soars, amplifying a trend toward drinking at home. Almost three-quarters of Irish bars said sales have fallen in the last five years, the report shows. Revenue has also been affected after Ireland banned smoking in public places in 2004 and more recently cracked down on drink-driving. "We're looking at a fairly significant decline in numbers," economist Anthony Foley, author of the report, said at a press conference in Dublin. "We're looking at over two thousand rural pubs disappearing in the next decade or decade and a half."

The upcoming U.S. holiday shopping season, typically a period of high consumer spending, will be eyed as a measure of economic recovery. Holiday travel and more shopping outings may boost oil consumption over the season, but more expensive fuel could curb these trips.

"A hike in discretionary driving associated with holiday shopping trips will exert more demand pressure, although if pump prices move above $3, it will not only kill discretionary driving but holiday shopping too," said Mike Fitzpatrick of MF Global in New York.

But fundamentally, there is much to restrain prices. Fuel supplies are brimming and that could make it harder for refiners to raise retail gasoline prices, delaying the impact of higher oil prices on consumers.

"Regrettably, our Carmel store is a victim of the downturn in the economy," said Wilkes Bashford, founder and chairman of his namesake company. "While we are saddened by the closure of the Carmel store, it provides the opportunity to redirect our energies and resources to our downtown San Francisco flagship and Palo Alto stores."

The Monterey Peninsula depends heavily on tourism to support many of its businesses, which have suffered in the recession.

CIT has agreed to accept $1 billion in backup financing from Mr. Icahn, which it would tap if it needs more than $4.5 billion it recently received from other bondholders, these people said. CIT stock was halted on the news.

As part of further discussions with CIT, Mr. Icahn has agreed to back down while the company restructures in bankruptcy court. CIT launched a debt-exchange offer about a month ago while also asking bondholders to vote on a prepackaged bankruptcy plan. The results of CIT's debt-exchange offer have not yet been finalized, but people close the company said it had likely failed. Meanwhile, the company had cleared significant hurdles that would give it more support than it needs for its prepackaged bankruptcy plan, a person familiar with the matter said.

The company plans to file for bankruptcy in New York as soon as Sunday night or early Monday, said people familiar with the matter. CIT is poised to enter bankruptcy with enough creditor support to approve its reorganization plan and shorten its stay in Chapter 11, these people said.

CIT and Mr. Icahn declined to comment. The deal comes as Mr. Icahn has so far failed to persuade bondholders to block CIT's restructuring plan, these people said. The billionaire investor tried to derail CIT's restructuring plan by offering bondholders 60 cents on the dollar to vote down the lender's debt-exchange offer and prepackaged bankruptcy plan.

"2009 has been a challenging year but the worst is behind us. Today we are looking to the future with optimism," Guerra said, speaking at an earlier shareholders' meeting, where the payment of a dividend of 0.22 euro per share was approved.

He said Luxottica was working towards making 2010 "a return to normality" for the maker of Prada and Ray-Ban sunglasses.

On a conference call with analysts, he said Luxottica was building to go back to mid-single digit growth in 2010 sales and the ratio between EBITDA and debt should be below 2.5 times.

"We want to have a strong growth in profitability, we want to be back to our normal terms," Guerra said.

Versace expects a loss this year and has a "flat" outlook for 2010, it said in a statement today. The company will eliminate about 350 positions worldwide from a total of 1,360.

"Trading conditions in the wake of the global financial crisis have been severe," Chief Executive Officer Gian Giacomo Ferraris said in the statement. "No organization can allow a situation like this to continue."