Wall Street’s best quarter in more than a decade ended in disappointing fashion on Tuesday as the Dow tumbled almost 100 points amid questions about the strength of a potential second-half rebound for the beaten-up U.S. economy.

Today's Markets

The Dow Jones Industrial Average fell 82.38 points, or 0.97%, to 8447.00, the Standard & Poor's 500 lost 7.90 points, or 0.85%, to 919.33 and the Nasdaq Composite sank 9.02 points, or 0.49%, to 1835.04. The consumer-friendly FOX 50 tumbled 5.12 points, or 0.75%, to 679.47.

The selloff, which erased nearly all of Monday’s rally, was sparked by a new report that revealed consumer confidence unexpectedly deteriorated in June. The confidence report was the latest example of a warning sign amid the recent glimmers of economic hope that sent the S&P 500 to its best quarter since 1998. 

In fact, the disappointing data gave more fuel for the bears, who have said stocks have gotten ahead of the still-weak economy. 

“At the end of the day, we still need fundamentals to catch up to valuations. That may take a while. We may be in a holding pattern until that happens,” said Peter Kenny, managing director of Knight Capital Markets.

Tuesday's selloff comes after the markets rallied on very low volume a day ago. Aside from the new report on consumer confidence, the markets were hurt by a pullback from the energy sector, which came under fire as crude tumbled 2%. 

“The market is just trying to figure out whether the economy is just getting 'less-worse' or if we’re going to truly get better, which would warrant higher stock prices,” said Paul Nolte, director of investments at Hinsdale Associates. “On the other hand, if things roll back down again, obviously so will the market.”

The blue chips, which capped off their best one-quarter rally since 2003, were led lower by Caterpillar (CAT) and American Express (AXP). On the upside, Intel (INTC) and McDonald's (MCD) rose slightly. 

Stocks hit session lows after the Conference Board said its consumer confidence index unexpectedly tumbled to a 49.3 reading in June, well below May's 54.8 reading and not even close to expectations for an improvement to 56. Lower confidence would likely translate to less spending, which accounts for more than two-thirds of the economy. The report sent shares of consumer discretionary stocks like Expedia (EXPE) and Starbucks (SBUX) tumbling. 

“Spending is not going to be coming back nearly as fast as we’ve seen coming out of past recessions because debt levels are still too high,” said Nolte. “It’s going to be a low trajectory recovery because we’re not going up on leverage like we had in the past.”

Energy stocks like Hess (HES) were some of the biggest drags on the markets Tuesday as crude oil gave back nearly all of Monday's big gains. Crude closed down $1.60 per barrel, or 2.24%, to $69.89. Still, crude surged 40.7% during the quarter, its best period since September 1990. 

Tuesday marked the last day of the second quarter, which was the S&P 500's best since the fourth quarter of 1998.  Before hitting a road block in June, stocks soared off their March lows as the credit crisis eased and signs emerged that the recession may have ended. 

At the same time, the second quarter also saw the demise of General Motors and the unemployment rate tick closer to 10%. The markets are already focused on Thursday’s jobs report, which is expected to show nearly 400,000 people lost their jobs in June.

“If only we had an offseason, just like in sports, to enjoy the victory, but we don't. Q3 begins with a bunch of important economic data not only in the US but overseas,” Peter Boockvar, equity strategist at Miller Tabak, wrote in a note.

Data Dump

The S&P/Case-Shiller home price index showed the month-to-month decline in April slowed for the third-straight month. While prices in the group's 20-city index were off in April by just 0.6%, they were still down 18.1% from a year ago. 

Corporate Movers

UBS (UBS) still appears to be in the crosshairs of the U.S. despite recent reports the Justice Department agreed to settle its tax evasion probe of the Swiss bank. The U.S. said it is still pursuing its five-month old lawsuit and urged the court to force UBS to identify U.S. clients with secret accounts. Such disclosure would violate Swiss law, UBS said.

Johnson & Johnson (JNJ) was dealt a blow as the FDA voted to lower the maximum allowed dosage for acetaminophen products such as the drug maker’s Tylenol.

H&R Block (HRB) saw its shares jump a day after the largest U.S. tax preparer beat the Street with a 26% jump in earnings. The company’s earnings guidance also topped estimates.

JPMorgan Chase (JPM) is toying with the idea of boosting base salaries for investment bankers in an effort to avoid losing key employees to rivals, the New York Post reported. The plan hasn’t been finalized but could help the bank from paying big bonuses that have been criticized, the paper reported.

Global Markets

London's FTSE 100 fell 1.04% to 4249.21, France's CAC 40 declined 1.67% to 3140.44 and Germany's DAX tumbled 1.56% to 4808.64. 

In Asia, Japan's Nikkei 225 advanced 1.79% to 9958.44, Hong Kong's Hang Seng slipped 0.81% to 18378.73 and China's Shanghai Composite fell 0.54% to 2959.36.