Indexes end mostly higher after late rally

Investors f lock to safer small-company stocks shielded from trade war

Major U.S. stock indexes closed mostly higher Tuesday, erasing much of an early slide, as investors favored smaller, U.s.-focused companies for the second straight day.

Industrial, energy and health care stocks helped power the market higher. Banks also notched solid gains amid a broad pullback in demand for U.S. government bonds, which pushed yields higher. The yield on the 10-year Treasury note climbed to 1.73 percent from 1.62 percent late Monday, a big move.

Lenders rely on higher yields to set more lucrative interest rates on loans. Bank of America rose 2.5 percent, Goldman Sachs

gained 1.7 percent and State Street vaulted 9 percent.

For the second day in a row, traders unloaded technology stocks and shares in companies that rely on consumer spending. Microsoft dropped 1.1 percent, as did payment processors Visa and Mastercard, losing 2.8 percent and 3.9 percent, respectively.

“It seems like a complete reversal of what’s kind of been the theme over the last few months, where it’s been more about higher quality, higher market cap, higher growth, more stable growth and lower volatility,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. “Things that had been doing well just completely got sold and the things that had been lagging completely got bought.”

The S&P 500 index inched up 0.96 points, or less than 0.1 percent, to 2,979.39. The Dow Jones Industrial Average rose 73.92 points, or 0.3 percent, to 26,909.43. The average was briefly down 118 points. The Nasdaq, which is heavily weighted with technology stocks, slid 3.28 points, or less than 0.1 percent, to 8,084.16.

Investors continued to flock to smaller-company stocks. They’re seen as being better shielded from the fallout of the costly trade war between the U.S. and China than large multinationals. Among the smallcap gainers were ABM Industries, which rose 3.1 percent and Spectrum Pharmaceuticals, which jumped 16.9 percent.

The Russell 2000 index of smaller-company stocks led the gainers, adding 18.76 points, or 1.2 percent, to 1,542.99.

The broader market has been gaining ground for two weeks as investors remain confident in the strength of the economy, despite the lingering trade war between the U.S. and China. Recent plans for trade talks to resume in October raised some hope on Wall Street for a resolution.

Traders knocked Wendy’s shares 10.5 percent lower after the fast-food chain cut its profit growth forecast because of plans to expand its breakfast options nationwide. The company plans to invest $20 million this year in the expansion and expects up to 6.5 percent profit growth instead of 7 percent growth.