NEW YORK (CNNMoney.com) - The stock market got creamed Tuesday in one of its worst days so far this year as falling consumer confidence spooked investors already anxious ahead of a week packed with economic news.

The Dow Jones industrial average (down 184.18 to 11,094.43, Charts) and the broader Standard & Poor's 500 index (Charts) both sank about 1.6 percent.

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The Nasdaq composite (down 45.63 to 2,164.74, Charts) tumbled just over 2 percent. The declines were the third-biggest in point terms for all three major gauges.

Elsewhere, the dollar fell, oil rose and Treasury bond prices ended little changed.

Tuesday's stock market declines more than erased last week's tentative gains and probably mean the sell-off in the market isn't over -- at least for now.

"We got that. Now what do you do?" said Tony Dwyer, chief stock market strategist at FTN Midwest, referring to last week's modest bounce. "There's not going to be a lot of buying going into a week flush with economic data."

The sell-off started May 11, the day after the Dow came within 80 points of its all-time high, and took the market down roughly 5 percent over a two-week period on fears of rising inflation.

Dwyer said he's not looking for much good news from this week's economic numbers, which include a manufacturing report, construction spending, auto sales and chain store sales all on Thursday, and the widely awaited May employment report, due Friday.

Not to be overlooked are the minutes from the last Fed meeting, set for release Wednesday afternoon.

Dwyer believes the minutes will contain language indicating that the central bank's long-awaited pause in its rate-hiking campaign is fast approaching.

That could eventually be positive for stocks in coming weeks though he held out little hope for the rest of this week.

All 30 stocks in the Dow Industrials ended the day in the red.

Sectors hit hardest Tuesday were financial stocks, construction and technology. The AMEX Securities Broker/Dealer Index and the Dow Jones Home Construction Index both fell around 3 percent and the Goldman Sachs Internet index fell over 2.5 percent.

Earlier Tuesday, the Conference Board said its reading on consumer confidence fell to 103.2 in May from a revised April reading of 109.8, which was a four-year high.

Although the reading came in above estimates, which were pegged at 100, one expert said the size of the drop was still unsettling.

"People knew the number was going to be down, but it's significantly lower than last month's," said Michelle Clayman, chief investment officer at New Amsterdam Partners. "The concern is that gas prices and interest rates are taking a toll on the consumer."

Consumer spending accounts for nearly 70 percent of the economy and some investors are worrying that with gas prices rising, and the housing market slowing down, a pullback could mean markedly slower economic growth ahead.

Those hoping consumers will get a little relief at the pump won't find it in Tuesday's oil prices. U.S. light crude for July delivery jumped 66 cents to settle at $72.03 a barrel on the New York Mercantile Exchange.

Also making headlines Tuesday morning: News that President Bush has tapped Goldman Sachs CEO Henry Paulson to succeed John Snow as Treasury Secretary.

There had been speculation Paulson wasn't interested in the job and the pick came as a bit of a surprise, but Clayman said the choice shouldn't rattle investors too much.

"Clearly he's a very successful business man, he's certainly well respected in the business community," she said.

In corporate news, shares of General Motors were downgraded to a "sell" recommendation from a neutral rating by Deutsche Bank. GM (down $1.26 to $26.82, Research) shares fell over 5 percent.

The drop came after the troubled automaker rallied last week on upgrades by Merrill Lynch and Prudential.

Shares of Wal-Mart Stores (Research) fell nearly 3 percent after the world's No. 1 retailer said higher gas prices left its May sales gain at the low end of its earlier guidance. Wal-Mart and other major retailers are due to report May sales before the market open Thursday.

Shares of Kinder Morgan (Research) surged more than 18 percent after senior management of the gas and oil pipeline operator announced plans late Monday to take the company private for $100 a share, a premium of about 18.5 percent over its closing price Friday. The deal would be worth $13.4 billion.

British telecom Vodafone reported a record $40.9 billion loss, although its U.S. shares (up $0.25 to $22.54, Research) rose over 1 percent as the company raised its dividend and the amount it planned to return to shareholders by $5.6 billion despite the loss.

Market breadth was negative. On the New York Stock Exchange, decliners beat advancers by a margin of three to one on volume of 1.5 billion shares. On the Nasdaq, losers also beat winners by a margin of three to one as 1.7 billion shares changed hands.

Elsewhere, Treasury bond prices ended little changed, leaving the yield on the benchmark 10-year note around 5.07 percent, where it settled late Friday.

The dollar fell against the euro and yen.

U.S. markets were closed Monday for Memorial Day.

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