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James Hyerczyk
U.S. Stock Indexes

The major U.S. stock indexes finished mixed on Tuesday with technology shares weighing the most on the market. The pressure in the technology sector was attributed to the news that nearly all the nation’s state attorneys general are probing Big Tech companies.

Individually, shares of Ford were pressured by a downgrade to its credit rating. Higher yields helped drive Bank of America shares up 2.5%. Goldman Sachs gained 1.7% and State Street rose 9%.

In the cash market, the benchmark S&P 500 Index settled at 2979.39, up 0.96 or +0.03%. The blue chip Dow Jones Industrial Average finished at 26909.43, up 73.92 or +0.29% and the technology-based NASDAQ Composite closed at 8084.16, down 3.28 or -0.04%.

Late Session Surge

Stocks actually spent most of the session under pressure, but a late session rally helped the S&P 500 and Dow erase those early losses. The late surge was fueled by a recovery in industrial, energy and health care stocks. Higher U.S. Treasury yields helped bank stocks post solid gains.


Rotation from Growth Stocks to Value Stocks

For a second session, there was evidence of investor rotation from growth stocks to value stocks.

“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.”

Small Caps Attractive

For a second session, investors also flocked to small-cap companies on the premise that they may be better shielded from the fallout of the expensive trade war between the United States and China than large multinational corporations.

Small-cap winners included ABM Industries, which jumped 3.1% and Spectrum Pharmaceuticals, which surged 16.9%.

The Russell 2000 Index, which is composed of small-cap stocks, gained 1.2%.

Technology Shares Feeling Heat

U.S. technology shares continued to diverge from the S&P 500 Index and Dow for a third session on Tuesday led by steep losses in the FAANG group.

Tech giants Facebook, Amazon, Netflix and Google’s parent Alphabet all declined amid the antitrust investigation into Google. Apple shares bucked the trend on Tuesday, rising 1.2% after announcing a new slate of iPhones and other products, including a $5 a month streaming video service, which would be cheaper than rival offers.

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