Investors now fear fiscal cliff more than weak economy

— -- NEW YORK -- Stocks mostly headed higher Wednesday with new data providing hope to beleaguered U.S. homeowners and the housing industry as well.

Construction of new homes and apartments rose 2.3% in August to a seasonally adjusted annual rate of 750,000, the Commerce Department reported, driven by the fastest pace of single-family home construction in more than two years.

Existing home sales in August jumped 7.8% to the highest level since May 2010, the National Association of Realtors said Wednesday. The numbers were well above expectations although the housing recovery has a long ways to go to return levels consistent with a health market.

Benchmark stock indexes were trading mixed after the release of the housing data.

Overseas, Japan's benchmark stock index hit a four-month high after the nation's central bank Wednesday followed last week's lead of the Federal Reserve and the European Central Bank. The Bank of Japan broadened its massive asset purchasing plan, boosting funding to 55 trillion yen ($700 billion) from 45 trillion yen.

Precious metals Wednesday traded at levels not seen in several months, after the Bank of Japan announced a surprise boost to its asset-buying program, putting it in lockstep with recent moves by other central banks.

Gold for December delivery hit a six-month high, almost breaking $1,781 an ounce in overseas trading before falling back to $1,774.70, up $3.50, in New York trading.

Last week, stocks globally skyrocketed after the Fed announced that it would spend $40 billion a month on mortgage-backed securities until the U.S. economy shows significant improvement. The Fed also plans to keep short-term interest rates near zero until at least mid-2012. Fed's goal is to lower long-term interest rates and encourage more borrowing and spending.

And the ECB has laid out a detailed plan for helping debt-ridden eurozone nations with a permanent multibillion-dollar fund that will be doled out to those who meet fiscal and cost-cutting requirements.

However, the bid by Tokyo to dampen the strong yen in order to better compete internationally did little for markets overseas Wednesday.

"Perhaps we are seeing investors suffering from a bout of central bank fatigue, or perhaps it is a dawning realization that, even with policymakers dispensing cash left, right and center, there is still a slowing global economy," said Chris Beauchamp, market analyst at IG Index.

And it's not the biggest worry, according to the September Bank of America Merrill Lynch's Fund Manager Survey. For the first time in 18 months, not even Europe's debt crisis is the No. 1 "tail risk" that worry global money managers. (A tail risk is a rare event that could cause stocks to suffer a disproportionate drop.)

The new megarisk is the looming fiscal cliff in the U.S., according to the survey. The realignment in the pecking order of Wall Street anxieties serves as a warning to Main Street investors wondering what could trip up their investment portfolios at a time when stocks are as high as they've been in almost five years.

The fiscal cliff is a potential growth-crimping one-two punch of rising taxes and government spending cuts set to kick in Jan. 1 unless Congress acts to avoid it. The Congressional Budget Office says the U.S. economy will suffer a recession in 2013 if lawmakers fail to act.