An unexpected decline in a closely-watched gauge of U.S. consumer confidence weighed on stocks Tuesday even though it did little to dampen expectations that the U.S. economic recovery is picking up steam.

The Conference Board reported that its main consumer confidence index fell to 52.5 in December from an upwardly revised 54.3 the previous month amid ongoing concerns over jobs. The decline was unexpected — the consensus in the markets was for the index to push up to 56.

Though stock markets in both Europe and the U.S. pushed lower following the survey, the response was fairly muted because the it contrasted with the general thrust of recent economic data out of the U.S., especially after the agreement between the Obama administration and the Republicans in Congress to extend due-to-expire tax cuts.

"We expect an uptrend in consumer spirits to remain in place for the foreseeable future," said Joshua Shapiro, chief U.S. economist at MFR Inc.

In Europe, France's CAC-40 was barely a point lower at 3,861.32 while Germany's DAX was around 9 points lower at 6,961.85. British markets were closed for a holiday.

In the U.S., the Dow Jones industrial average was down 7.27 points at 11,547.76 soon after the open while the broader Standard & Poor's 500 index fell less than a point to 1,256.86.

Aside from the state of the U.S. economy, investors continued to evaluate the effects of China's decision over the weekend to raise its key interest rate by a quarter of a percentage point to 5.81 percent — its second increase in just over two months.

Commercial real estate financier Walker & Dunlop Inc. said it has priced its initial public offering at $10 per share, well below the company's expected range.

The offering includes about 10 million shares, including 6.7 million being sold by Walker & Dunlop and another 3.3 million sold by initial shareholders. The company, which is based in Bethesda, Md., had expected to sell its initial shares between $14 and $16 apiece.

Walker & Dunlop has said in previous regulatory filings that it expects to net $89.5 million in proceeds from the offering. It won't receive proceeds from the sale of shares by shareholders. The company plans to use the proceeds to execute its growth strategy, fund working capital needs and for general corporate purposes.

The company has also said that it does not anticipate paying any cash dividends in the foreseeable future.

Walker & Dunlop was founded in 1937 and has grown into one of the biggest originators and sellers of commercial real estate loans, particularly in the apartment buildings segment.

In addition to originating loans for sale to investors or government mortgage finance companies, Walker & Dunlop also services apartment building mortgages and other commercial real estate financing products.

Last year, the company originated more than $2.2 billion in commercial real estate loans, the majority through programs by government-sponsored entities such as Fannie Mae or the Department of Housing and Urban Development.

Real estate investment trust Lexington Realty Trust said Wednesday it is publicly offering $77 million in common stock.

The company is offering 10 million shares at $7.70 apiece, marking a 4.3 percent discount to the stock's closing price of $8.05 on Tuesday.

The company also granted the underwriter a 30-day option to buy up to an additional 1.5 million shares. Barclays Capital is the sole book running manager.

The offering is expected to close on Dec. 20. The company has about 134.7 million shares of common stock outstanding.

Lexington Realty said it would use proceeds to repay debt and for general corporate purposes.

Shares of Lexington Realty rose 6 cents to $8.11 in morning trading on Wednesday.

An unexpected rise in the U.S. unemployment rate is pushing stocks down as investors move money into safer assets.

The government reported that the unemployment rate climbed to 9.8 percent in November, a seven-month high. That's up from 9.6 percent the previous month. Employers added 39,000 jobs. Economists had forecast a gain of 145,000.

The Dow Jones industrial average is down 25, or 0.2 percent, to 11,337.

The S&P 500 index is down 4, or 0.3 percent, to 1,217. The Nasdaq composite index is off 1.51, or 0.1 percent, to 2,577.

The yield on the 10-year Treasury note is down to 2.96 percent from 3.00 percent late Thursday. That yield helps set interest rates on many loans, including home mortgages.

U.S. short-term interest rate futures traders boosted bets the Federal Reserve will wait until mid-2012 before raising rates, after a government report showed the U.S. jobless rate unexpectedly rose in November.

Friday's report showed the unemployment rate rose to 9.8 percent. Economists had expected a rate of 9.6 percent.

Futures traders now are not fully pricing in an increase in the target rate for overnight lending between banks until May 2012, trading in federal funds futures at CME Group Inc's Chicago Board of Trade shows.

The Fed, which has kept short-term interest rates near zero for the past two years, last month embarked on a new round of Treasury buying to push borrowing costs down further in order to boost the economy and jobs.

Encouraged by recent stronger economic data, traders had been speculating the Fed might curtail its $600 billion Treasury debt purchase program, known as quantitative easing. Before the report they had been pricing in a better-than-even chance of a rate rise by December, 2011.

They backed off those bets after the jobs report, reflecting the view that the Fed may need to keep rates lower for longer to nurture what is still a fragile recovery.

"A softer-than-expected jobs number probably makes people a little more comfortable with the idea that the Fed will steadily progress with its planned quantitative easing," said Nick Bennenbroek, a currency strategies with Wells Fargo in New York.