A much larger-than-expected drop in consumer confidence drove U.S. stocks lower on Tuesday as investors reassessed the pace of the economic recovery.

Technology shares led declines with chip maker Intel Corp down 2.6 percent to $20.33 and the S&P information technology sector <.GSPT> down 1.5 percent.

Concerns about the economy also hurt oil and other commodity prices, and shares in the energy and materials sectors were among the hardest hit. Aluminum producer Alcoa Inc fell 2.4 percent to $13.22.

Consumer confidence fell in February to the lowest in 10 months, and the monthly Standard & Poor's/Case-Shiller index of home prices unexpectedly slipped in December.

Investors will probably conclude from this that the economy is likely to weaken as the year progresses, said Carmine Grigoli, chief U.S. investment strategist at the equities division of Mizuho Securities USA in New York.

You need better consumer confidence and employment gains to really build a sustainable economic recovery and that's not in the cards in the near term.

The Dow Jones industrial average <.DJI> lost 77.61 points, or 0.75 percent, to 10,305.77. The Standard & Poor's 500 Index <.SPX> dropped 11.16 points, or 1.01 percent, to 1,096.85. The Nasdaq Composite Index <.IXIC> fell 30.12 points, or 1.34 percent, to 2,211.91.

The losses reversed stocks' recent trend. The broad S&P 500 index has risen in four of the past five trading days and posted weekly gains in the last two weeks.

Economic data overshadowed stronger-than-expected quarterly earnings from retailers, including Home Depot Inc . The largest U.S. home improvement chain beat estimates and raised its profit forecast, sending its shares up 1.7 percent to $30.84.

Retailer Target Corp posted a quarterly profit slightly above Wall Street's expectations, but investors had hoped for a bigger improvement and shares fell 1.4 percent to $49.91.

The U.S. economic data followed an unexpected decline in business sentiment in Germany, which had earlier pressured overseas markets.

(Editing by Kenneth Barry)