The Colombian peso weakened against the U.S. dollar to end above the COP2,600 threshold following a drop in U.S. stock prices earlier Tuesday.

The Colombian peso ended at 2,609.98 to the dollar Tuesday from COP2,587 Monday in an active session that traded about $1.2 billion. The peso hadn't closed that weak since June 28, 2006, when it reached COP2,624.20.

Juana Tellez, head of research at the local unit of Spanish bank Banco Bilbao Vizcaya Argentaria, said the peso started weakening when the Dow Jones Industrial Average slid into the red earlier Tuesday.

The DJIA erased an earlier rebound midday as market veterans saw little to sustain the early burst of buying. Later in the afternoon, it rose briefly with energy, materials, and tech sectors leading.

Colombian markets close every day at 1:00 p.m. and couldn't react to U.S. markets in the afternoon.

Nicolas Uribe, foreign exchange trader at local brokerage Correval, said the peso weakened Tuesday even though the treasury was selling dollars in the spot market to control the peso's depreciation.

"Yesterday and today, the treasury was present in the market by selling dollars," Uribe said. "Even though it intervened, it has not been able to stop the strong peso's depreciation."

The peso has weakened 13.4% since the beginning of the year.

Tellez expects the peso could hit as much as 2,800 under the worst scenario, "but the real resistance level will be around COP2,660," she added.

In the local bond market, the yield on the benchmark peso-denominated bond, known as TES, maturing in 2020 ended at 9.546%, lower than 9.642% Monday.

The 2020 TES bond fell as market participants believe inflation will rise in February at a lower pace than in the same month last year, said Tellez.

Meanwhile, the IGBC stock index rose 0.5% to 7,651.05 points.

State-controlled oil company Ecopetrol (ECOPETROL.BO) registered the highest trading volume. Ecopetrol rose 0.5% to COP2,060.

Preferred shares of the country's largest bank Bancolombia (CIB) climbed 0.8% to COP10,720.

-By Diana Delgado, Dow Jones Newswires; 57-1-6107044 ext 1132