Wall Street consolidated after its best week in two years on Tuesday with choppy, low-volume trading seen during the remainder of the summer.

Equities had rallied for five straight days for a 5.6 percent gain on the S&P, rebounding from weakness over the past two months. But with question marks over the U.S. economy and the U.S. debt ceiling, the summer could be a rough one.

Linda Duessel, market strategist at Federated Investors in Pittsburgh, said the S&P 500 would likely fall back toward 1,250 this quarter, around its lows during the recent selloff.

It's going to be a long quarter, she said. Confidence is low, the volatility index is low, you have professionals only pretty much trading the market.

Volume is expected to remain low in the holiday-shortened week, which could increase volatility, especially with Friday's jobs report looming large on the horizon. Markets were closed on Monday for the U.S. Independence Day holiday.

The Dow Jones industrial average <.DJI> dropped 32.77 points, or 0.26 percent, to 12,550.00. The Standard & Poor's 500 Index <.SPX> fell 5.05 points, or 0.38 percent, to 1,334.62. The Nasdaq Composite Index <.IXIC> lost 4.64 points, or 0.16 percent, to 2,811.39.

Duessel said she is expecting the S&P 500 to face tough resistance at 1,350 as bulls try to take the market up toward

its recovery high around 1,370.

New orders received by U.S. factories bounced back in May, boosted by demand for transportation equipment, a government report showed. But the 0.8 percent rise was slightly below economists' forecast.

Southern Union Co advanced 2.8 percent to $41.52 after pipeline operator Energy Transfer Equity LP raised its bid to buy its rival by 21 percent to about $5 billion, trumping the $4.9 billion bid offer from Williams Companies Inc .

Immucor Inc surged 30.2 percent to $26.99 after the diagnostics firm said it agreed to be acquired by private equity group TPG Capital for a fully diluted equity value of $1.97 billion.

(Reporting by Edward Krudy; Editing by Kenneth Barry)