WHAT TO WATCH: U.S. new home sales probably fell in August to a 294,000 annual pace, economists forecast, 10 a.m. Pimco predicts advanced economies will stall over the next year as Europe slides into recession. Banks are paying the most to convert euro payments into dollars in almost three years. German Chancellor Angela Merkel and Greek Prime Minister George Papandreou will discuss Greek austerity at a dinner in Berlin tomorrow. The ECB may debate restarting covered bond purchases, a euro-region central bank official said.

ECONOMICS: Chicago Fed National Activity Index, 8:30 a.m. Dallas Fed Manufacturing Activity Index, 10:30 a.m. Fed’s Raskin, 9:15 a.m. Fed’s Bullard, 9:30 a.m. ECB’s Bini Smaghi, 9:30 a.m. ECB’s Weidmann, 12 p.m. Fed’s Kocherlakota, 3 p.m.

COMPANIES: Boeing hands over the first 787 Dreamliner today after more than three years of delays.

GOVERNMENT: U.S. banks would have to change the way they compensate traders involved in market-making activities under one of the proposed restrictions of the Volcker rule, according to a draft circulating among regulators.

MARKETS: The euro hit a decade low against the yen. Gold slid below $1,600 an ounce. The yuan may be fully convertible in five years, said a central bank adviser. An Australian-based exchange for gold, silver and platinum will start up Oct. 24.