Stocks fall as U.S. data dims hopes

By Herbert Lash

NEW YORK (Reuters) - Global stocks fell on Tuesday after a decline in U.S. consumer confidence cast doubt about the strength of a recovery that set MSCI's world equity index on course for its best quarterly gain since its 1988 inception.

In a sign the worst of the credit crisis and world recession may be passing, crude oil prices posted their strongest quarter in 19 years, despite a 3 percent slide on Tuesday spurred by a weaker dollar and the U.S. confidence data.

The Conference Board's index of consumer attitudes fell unexpectedly in June to 49.3 from a downwardly revised 54.8 in May, helping turn European stocks lower and halt an early sell-off in the U.S. currency.

The data also pushed U.S. stocks lower, but the benchmark Standard & Poor's 500 Index posted its best quarterly performance since the fourth quarter of 1998, rising 15.2 percent from April through June

It was the first positive quarterly performance of the S&P 500 since the third quarter of 2007. The CBOE Volatility Index .VIX, a gauge of investor fear, had its biggest quarterly drop since 1998, down nearly 40 percent.

The S&P 500 is up 35.9 percent since sliding to a 12-year closing low on March 9.

Investors took heart in recent data that showed a freeing up of credit markets, a cyclical, inventory-driven rebound in manufacturing, an easing of the housing market slump and a rebound in business and consumer confidence.

Authorities have gained traction against the downturn via extraordinary monetary policies, with official interest rates near zero and long-term borrowing rates capped by measures known as quantitative easing.