By Herbert Lash

NEW YORK (Reuters) - The dollar retreated broadly and oil slid down for the fourth straight session on Tuesday as a fall in consumer confidence and lower housing prices renewed concerns about the health of the U.S. economy.

U.S. stocks traded mostly flat, while European stocks rose after a four-day holiday weekend, propelled by gains in financial shares in an echo of Monday's rally on Wall Street after JPMorgan Chase sweetened its bid for rival investment bank Bear Stearns.

Gold rebounded after the dollar resumed its downward trend, but weaker oil prices reduced the metal's appeal as a hedge against inflation and capped gains.

Two reports on Tuesday showing further drops in U.S. home prices revived concerns about the U.S. consumer and the economy's slowdown, reversing day-earlier optimism on a report that showed a rise in sales of existing homes. The new data lifted U.S. Treasury debt prices.

Another report showed U.S. consumer confidence in March fell to a five-year low, adding to the sense that while much has been done to ease a credit crunch that has slammed financial markets, the outlook on Main Street is worsening.

U.S. stocks capped their biggest two-session advance in nearly four months on Monday after JPMorgan Chase & Co lifted its offer five-fold for Bear Stearns to $10 a share, mitigating concerns in the key but battered financial sector.

"What you're getting is the reality check of the rally we had since the Bear Stearns deal was announced," said Jim Awad, chairman of W.P. Stewart & Co Ltd in New York.

"Up until today the market has had an admirable capability to go up in the face of bad news. Today is the first day it is not holding."