TOPWRAP 8-Economic data dim hope for quick world recovery

* U.S. consumers' gloom hurts recovery outlook

* Euro zone bank lending growth slowest on record

* Japan jobless highest since Sept 2003

* Stocks surge in quarter, but fall on last day

(For more on the global crisis, click on [nCRISIS]) (Updates U.S. prices, changes byline)

By Leslie Adler

NEW YORK, June 30 (Reuters) - An unexpected fall in U.S. consumer confidence, slower European bank lending and a rise in Japanese unemployment to a six-year high on Tuesday clouded the outlook for a global economic recovery.

Other U.S. data showed more weakness in housing and in Midwest business activity, although there were glimmers suggesting the 18-month-old U.S. recession could be nearing an end.

The Conference Board's U.S. consumer confidence index fell in June, defying expectations of an increase and sparking investor concern about how quickly consumers will resume spending. [ID:nN30517712].

The report "continues to imply that economic conditions, while not as weak as earlier, are nonetheless weak," said Lynn Franco, director of the board's Consumer Research Center.

European and U.S. stocks fell on Tuesday on doubts about the recovery, but closed out the second quarter with double-digit gains as recent economic reports and stimulus measures by Western governments boosted markets from 12-year-lows hit in March.

In the United States, the broad Standard & Poor's 500 .SPX posted its best quarter since the final quarter of 1998, rising 15.2 percent. The Nasdaq surged 20.1 percent in the quarter, and the Dow Jones industrial average rose 11 percent.

The pan-European FTSEurofirst 300 index .FTEU3 rallied 15.9 percent in the April-June period, its best quarter since the last three months of 1999 and the first positive quarter since the market began to melt down in mid-2007.

For the day, the Dow Jones .DJI slipped 0.97 percent to 8,447.00, the S&P 500 0.85 percent to 919.32, and the Nasdaq .IXIC shed 0.49 percent to 1,835.04.

Billionaire investor George Soros sounded a gloomy note on Tuesday, predicting the United States faces "stop-go" economy because rising borrowing costs could generate major headwinds for the still-fragile economy.

"As markets revive, fear of inflation will drive up interest rates, which will choke off recovery," he said at a breakfast in New York. [ID:nN30440072]

HOME PRICES DECLINE

In other economic reports, prices of U.S. single-family homes fell in April from March, but in a hopeful sign the pace of the decline moderated, according to Standard & Poor's/Case Shiller home price indexes. [ID:N30432447] An index of 20 metropolitan areas dipped 0.6 percent, down from a 2.2 percent decline the month before.

U.S. housing was a key contributor to the global economic crisis, now more than 1-1/2 years old.

"While one month's data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some of the regions," said David Blitzer, chairman of the index committee at S&P.

Business activity in the U.S. Midwest contracted in June at a less severe rate than in May and slightly less than expected, another industry report said. [ID:nN3078228].

In the consumer confidence report, Americans who said jobs are "hard to get" increased to 44.8 percent from 43.9 percent the previous month.

U.S. job losses threaten consumer spending, another pillar of economic growth. Investors are eagerly awaiting the government's release on Thursday of June unemployment figures. Economists polled by Reuters forecast a rise in the unemployment rate to 9.6 percent, a 26-year high.

Japan's jobless rate in May rose to 5.2 percent, its highest level since September 2003, as a plunge in demand for exports hits the world's No. 2 economy.

TACKLE CRISIS' ROOT CAUSE

Germany, Europe's biggest economy, saw June unemployment rise, but the increase was less than economists had forecast.

Loans to euro zone businesses and households grew at the slowest pace on record in May, according to the European Central Bank.

Western governments have spent billions of dollars to recapitalize banks and get them lending again to tackle the credit crunch at the heart of the global crisis.

"It's true that banks are less willing to extend credit but the lending figures are also correlated with job losses, and show that there is not much demand from the real economy," said Philippe Gijsels, strategist at Fortis in Brussels.

General Motors Corp. GMGMQ.PK, one of the casualties of the global downturn, was in bankruptcy court in New York seeking approval for a sale of assets under a rescue plan devised by the Obama administration.

GM Chief Executive Fritz Henderson told the court that if the sale is not approved by July 10 and GM looses access to government funding, the company would be forced to liquidate.

The automaker faces objections and questions from its creditors committee, a group of dissenting bondholders and others. (Reporting by Reuters bureaus worldwide; editing by Philip Barbara)