Wall Street took its largest tumble in more than a month on Tuesday as the Dow fell nearly 100 points amid sinking banking stocks and apprehension ahead of the conclusion of the Federal Reserve’s two-day policy meeting.

Today’s Markets

The Dow Jones Industrial Average fell 96.50 points, or 1.03%, to 9241.45, the Standard & Poor's 500 slid 12.75 points, or 1.27%, to 994.35 and the Nasdaq Composite tumbled 22.51 points, or 1.13%, to 1969.73. The consumer-friendly FOX 50 dropped 11.21 points, or 1.52%, to 724.75.

The markets have now ended in the red in four of the past five sessions, with Friday's 114-point jump being the lone exception. Wall Street's four-week surge, which pushed the Dow up 15%, appears to have run out of steam as the bulls failed to rally Tuesday around a solid bond auction and the biggest jump in productivity in nearly six years.

“They look a little tired to me,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business. “It doesn’t mean we’re going to zero or back to where we were in March, but it looks to me like they’re rolling over and we’re pulling back.”

Still, the fact that Tuesday's slide represents the steepest pullback since July 7 is striking, especially when compared with the volatility and fear that regularly sent the Dow to triple-digit plunges earlier this year. That fear has receded as economic data and quarterly results suggest a second-half recovery for the U.S. economy.

“It has been a quiet rise through all of July. At least over the short term, there is some underlying strength in the market,” said Paul Nolte, director of investments at Hinsdale Associates. “Maybe investors sitting on cash are jumping aboard at this point.”

Almost all 30 components of the Dow closed lower, led by financial giants General Electric (GE), Bank of America (BAC) and JPMorgan Chase (JPM). Two of the only blue-chip stocks making headway were DuPont (DD) and Wal-Mart (WMT). 

The selloff in the financial sector came after influential analyst Dick Bove of Rochdale Securities said bank stocks are trading on “fumes” and recommended taking short-term profits. At the same time, regional banks like Huntington Bancshares (HBAN) tumbled after Miller Tabak cut its price targets on Zions Bancorp (ZION) and Regions Financial (RF).

Traders are also taking a cautious approach to the Federal Open Market Committee’s two-day policy meeting, which is set to conclude Wednesday afternoon. Economists see virtually no chance the central bank will hike rates from their historically-low levels due to continued economic weakness but the markets are looking for new insight into the central bank’s exit strategy following one of the biggest interventions in history. 

Stocks had little reaction to Tuesday's $37 billion auction of three-year Treasury notes, which marked a successful start to the first of three auctions. The sale received solid demand, offsetting some fears about the government's ability to finance its growing debt burden. But a pair of longer-dated auctions on Wednesday and Thursday are likely to be better gauges of foreign demand for U.S. debt. 

New data on non-farm productivity also failed to awaken the bulls. The Labor Department said second-quarter productivity rose 6.4%, well above the 5.5% gain economists predicted. The quarter marked the sharpest rise in productivity in nearly six years as employers laid off workers to cut costs amid the recession.

In the commodity markets, crude oil closed down for the fourth consecutive day. Crude fell $1.15 a barrel, or 1.63%, to $69.45-- its lowest settle since July 31.

Corporate Movers

CIT Group (CIT) tumbled almost 20% after the commercial lender warned it may need to file for bankruptcy and again delayed its quarterly report. The embattled lender said if its pending tender offer for $1 billion in debt is not successfully completed and if alternative financing is not obtained, it may seek relief from creditors from bankruptcy court.

Citigroup (C) said it approved $6 billion in new lending initiatives during the second quarter, bringing its total TARP initiatives to $50.8 billion. Citi has put to work $15.1 billion of that total, or nearly one third. The bank said its lending to U.S. consumers rose from the first quarter by 22% to $56.2 billion.

General Motors said its new Chevrolet Volt will be able to get 230 miles per gallon of gasoline. The car, which can go 40 miles on electricity alone and uses a gasoline-assisted engine, is expected to be sold in late 2010.

Corning (GLW) said the 6.4-magnitude earthquake that struck central Japan on Monday disrupted production at a Japanese factory, forcing the company to cut its production outlook for LCD screens. The glass maker said it now sees third-quarter volume falling 5% to 10% from a year ago.

Tellabs (TLAB) jumped to a 52-week high after the company announced plans to buy back up to $200 million of its stock. Tellabs, which has no debt, said late Monday it will use some of its $1.2 billion in cash and equivalents for the program, starting as early as Aug 13.

Data Dump

The Commerce Department said wholesale inventories tumbled by 1.7% in June, nearly twice as much as economists had predicted. The deep cuts in inventories could force companies to ramp up production, pushing the economy to a second-half recovery.  

Global Markets

European stocks took their largest one-day tumble since early July. London's FTSE 100 slid 1.08% to 4671.34, Germany's DAX slumped 2.44% to 5285.81 and France's CAC 40 fell 1.38% to 3456.18.

Asian markets closed higher overnight as Japan's Nikkei 225 rose 0.58% to 10585.46 and Hong Kong's Hang Seng climbed 0.69%.