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WASHINGTON, Nov 20 (Reuters) - The Conference Board's U.S. index of Leading Economic Indicators fell to its lowest in four years in October, as stock prices tumbled and consumer expectations weakened, the research group said on Thursday.
The index fell 0.8 percent to 99.6, the lowest since April 2004, when a reading of 99.3 was recorded. It rose a revised 0.1 percent in September.
"The economy is contracting, and the pace of contraction may intensify over the next few months," said Ken Goldstein, economist at the Conference Board.
Wall Street analysts had expected the leading index, a gauge of future economic conditions, to fall 0.6 percent.
"The economy was very weak, laboring under the weight of a sustained and intense housing downturn. While energy prices have begun to reverse, the financial crisis sharply lowered consumer and business expectations," said Goldstein.
"The result is a contraction in demand that may intensify this winter. The composite indexes are now decreasing at rates last seen in 2001, with widespread weakness among their components."
The U.S. housing collapse has unleashed a global financial crisis that has sparked major sell-offs on world stock markets, eroding consumers' wealth and their spending capacity.
The leading index was also weighed down by a drop in building permits. Between April and October this year, the leading indicator has declined 2.4 percent, falling faster than the 1.2 percent decrease over the previous six months.
Weakness among the leading indicators have continued to be widespread in recent months.
The Conference Board said its coincident index increased 0.2 percent, after five successive months of declines, as industrial production recovered from its sharp drop in September, and more than offsetting the the continued fall in employment.
The lagging index edged up 0.1 percent in October after gaining 0.3 percent in September. (Reporting by Lucia Mutikani; Editing by Neil Stempleman)