The stock market fell in earnest after the Conference Board reported an unexpectedly sharp decline in consumer confidence. Before the report, the market was also weighed by gloomy news from Europe.

The S&P 500 Index fell 10.70 points, or 0.97 percent, to trade at 1,097.31 at 10:27 am. The Dow Jones Industrial Average fell 65.52 points, or 0.63 percent, to trade at 10,317.86.

The Nasdaq Composite lost 1.19 percent as tech stocks like Microsoft (NASDAQ:MSFT) declined 1.53 percent and Cisco (NASDAQ:CSCO) declined 1.60 percent.

The Conference Board's Consumer Confidence unexpectedly dropped to 46.0 for February, down from the 56.5 in January. Analysts polled by Reuters were expecting a 55.0.

The overall index is the lowest since April of last year and the Present Situation Index dropped to its lowest level in 27 years.

Lynn Franco, a director from Conference Board, attributed the sharp decline to people's concerns about the job market and business conditions.

Global sentiments were further dampened by discouraging developments from Europe. Commodities prices fell on Tuesday and high yielding currencies declined versus the dollar and yen.

The euro and sterling pound also declined as a German business climate survey missed estimates and declined for the first time in 11 months, while Bank of England Governor Mervyn King gave a subdued outlook for the recovery of the global demand.

King said global demand recovery was fragile and the euro zone demand appears to have stalled.

Retailers reported positive results, though they could not counterbalance the reported loss of consumer confidence.

Home improvement giant Home Depot (NYSE:HD) beat estimates for both quarterly earnings and revenues, although revenues declined from last year. It is trading up 1.2 percent.

Macy's (NYSE:M), Sears (NASDAQ:SHLD), Target (NYSE:TGT) showed similar results, and Target actually reporting increasing revenues for the quarter.

However, these shares are weighed down by the consumer confidence index. Macy's is up only 0.16 percent and Sears is up 0.84 percent.

Target, however, was down in premarket trading and continues to slide in the regular session, losing 3.06 percent.

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