US STOCKS-Market drops as sentiment data spurs caution

* Consumer confidence unexpectedly drops in June

* Broad sell-off hammers tech, industrials, energy

* Dow off 1.2 pct, S&P 500 off 1 pct; Nasdaq off 0.6 pct

* For up-to-the-minute market news click [STXNEWS/US] (Updates to late afternoon, changes byline)

By Ellis Mnyandu

NEW YORK, June 30 (Reuters) - U.S. stocks slid on Tuesday as a surprising drop in a gauge of consumer confidence sparked caution about the economy's recovery prospects, hurting industrial, technology and energy shares.

The drop in the Conference Board's measure of consumer confidence in June suggested that the 18-month-long recession had yet to loosen its grip on the U.S. economy. (For details, see [ID:nN30517712])

Gloom among consumers is a major setback since their spending accounts for about two-thirds of U.S. economic activity.

But even with Tuesday's market sell-off, the benchmark S&P 500 was on course to close its first positive quarter in almost two years, reflecting some of the optimism that led to the index's gain of 40 percent from the 12-year closing low of early March as investors bet on economic stabilization.

"Consumer confidence is the excuse du jour for the latest market move," said Tom Alexander, head of Alexander Trading, in Savannah, Georgia.

"For the market to go much higher, you are going to have to see some real hard evidence of some of these things that are being anticipated by the market start to come to fruition. Pick one. Are the bank balance sheets really cleaned up? Nobody knows. The market has gone up on a lot of faith here."

The Dow Jones industrial average .DJI shed 100.82 points, or 1.18 percent, to 8,428.56. The Standard & Poor's 500 Index .SPX lost 9.60 points, or 1.04 percent, to 917.63. The Nasdaq Composite Index .IXIC slipped 11.44 points, or 0.62 percent, to 1,832.62.

Since its 12-year closing low on March 9, the S&P 500 is up 35.6 percent.

Among industrial stocks, shares of Caterpillar Inc (CAT.N), a maker of bulldozers and excavators, slumped 4.7 percent to $33.12, while on the technology front, International Business Machines Corp (IBM.N) tumbled 1.4 percent to $104.34.

On Nasdaq, chip maker Qualcomm QCOM.N , off 1.8 percent at $45.25. was the worst drag.