Stocks give up part of an early gain but still end higher

Stocks overcame a late-afternoon burst of selling and closed higher Tuesday, as gains in big technology companies outweighed losses in banks and elsewhere in the market.

The S&P 500 rose 0.5% after being up 1.1% earlier. It’s the second straight sizable gains for the benchmark index following its worst week since June.

High-flying technology stocks, which have been driving the market higher throughout the pandemic, abruptly lost altitude earlier this month amid worries that their prices had simply climbed too high, even after taking into account their tremendous growth.

But the past two days has marked a reversal of that trend, with shares in technology companies and others that play a key role in online access and commerce climbing again. Microsoft rose 1.6% Tuesday, while Amazon gained 1.7% and Zoom Video climbed 1.8%.

A key reason tech stocks are climbing again is that investors’ expectations that the companies’ profits will boom as even more of daily life shifts online haven’t changed.

“The things that are doing well or are beneficiaries or are working in this environment, for good reason, are the things that are going up,” said Tom Martin, senior portfolio manager with Globalt Investments. “That isn’t going to change until we get a notable change in one of the things that are uncertain: The virus itself and the effect that’s having on the economy, and whether we get anything new on the fiscal stimulus front.”

The S&P 500 rose 17.66 points to 3,401.20. The Dow Jones Industrial Average inched up 2.27 points, or less than 0.1%, to 27,995.60. The index swung between a gain of 237 points and loss of 61. The Nasdaq, which is heavily weighted with tech stocks, climbed 133.67 points, or 1.2%, to 11,190.32.

Stocks of smaller companies eked out a tiny gain. The Russell 2000 index of small-caps picked up 1.18 points, or 0.1%, to 1,538.15.

Because tech companies have grown so massive, their movements alone can dictate the market’s performance more than ever. Tech stocks as a group account for nearly 28% of the S&P 500, and they’re up 3.1% this week after slumping more than 4% in each of the prior two weeks.

Analysts expect more volatility for stocks in the months ahead as the market navigates uncertainty over the outcome of the election, pessimism that Democrats and Republicans in Washington will be able to reach a deal to send more aid to unemployed workers and an economy still struggling amid the pandemic.