MARKET SNAPSHOT: Stocks Extend 12-year Lows As Strategists Debate Significance

By Kate Gibson

As U.S. stocks tried and failed Tuesday to bounce back from the prior session's stumble to 12-year lows, analysts, technicians and would-be historians debated the significance of the declines, which may or may not signal an important market milestone.

On Tuesday, utility shares led losses, as the S&P 500 Index slid to its first close under 700 since Oct. 28, 1996, with a passel of testimony from federal officials doing nothing to calm jitters about the recession and the ailing financial system.

"Certainly when that November low of 750 was breached, getting to 700 happened relatively quickly. It's the economy and the extent [to which] corporate earnings have deteriorated," said Dean Curnutt, president of Macro Risk Advisors. "Folks are walking down the street and seeing a lot of empty storefronts."

After trading in a 150-point range on either side of zero during the day, the Dow Jones Industrial Average fell 37.27 points, or 0.6%, to 6,726.02. The S&P 500 declined 4.49 points, or 0.6%, to 696.33, and the Nasdaq Composite (RIXF) declined 1.84 points, or 0.1%, to 1,321.01.

On Monday, the Dow had closed at 6,763, a level not seen since 1997. If nothing else, the breach of 12-year lows is unusual. Other than Monday's retesting of 1997 lows, such a crossing has occurred only twice before, on Dec. 6, 1974, and April 8, 1932.

BOND REPORT: Treasurys End Higher As Stocks Hit Fresh 12-year Lows

By Nick Godt

Treasurys rose on Tuesday, while yields fell, after stocks made fresh 12- year lows after weak housing and auto sales data, along with a bleak assessment of the economy from Federal Reserve Chairman Ben Bernanke.

Speaking on Capitol Hill, Bernanke said that the most recent economic data, including on the labor market, showed little sign of improvement in recent weeks.

Reversing morning gains, government bonds returned to positive ground, sending their yields lower. Yields on benchmark 10-year Treasury notes (UST10Y) fell fractionally to 2.879%. Yields on two-year notes (UST2YR) were flat at 0.883%, while those on 30-year bonds (UST30Y) fell 1 basis points to 3.603%.

Bond prices move inversely to their yields.

Treasurys rose sharply on Monday as stocks tumbled to 12-year lows amid fresh concerns over the health of financial firms such AIG (AIG).

After rising firmly in morning trade Tuesday, stocks turned negative. The Dow Jones Industrial Average finished down 37 points at 6,726. The S&P 500 index dipped 4 points to 696, marking its first close below 700 since Oct. 28, 1996. the Nasdaq Composite (RIXF) lost 1 point to 1,321.

General Motors Corp. (GM), Ford Motor Co. (F) and Chrysler LLC said U.S. vehicle sales fell at least 44% in February.

Investors also failed to react positively to remarks from Treasury Secretary Timothy Geithner who spoke on the budget and didn't provide additional details on how the government intends to deal with the toxic assets that still plague banks' balance sheets.