A separate report showed U.S. home prices rose in April, but failed to provide support for the market. The S&P/Case-Shiller home price index, which measures home prices in 20 large metropolitan areas, rose 0.8 percent, boosted by the expiration of the federal first-time home-buyer tax credit.
Investors fled to safety assets, sending the dollar, gold and Treasuries higher. Yields on two-year Treasury notes fell to the lowest on record on Tuesday.