US STOCKS-S&P 500 ends with slightest gain as small caps favored

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* GM, Tesla help push up consumer discretionary sector
* S&P 500 financial sector boasts record closing high
* S&P energy stocks hit highest level since June
* Russell 2000 closes at record high for 3rd time in 5
sessions
* Indexes close up: Dow 0.19%, S&P 0.04%, Nasdaq 0.28%

(Adds closing price detail, comment, trading volume)
By Sinéad Carew
NEW YORK, Jan 12 (Reuters) - The benchmark S&P 500 closed
barely higher on Tuesday while shares in smaller companies
soared to record highs as investors favored more economically
sensitive market segments as they bet on a recovery in 2021.
U.S. Treasury yields climbed and the small cap Russell 2000
.RUT finished up 1.8% at a record high, after outperforming
throughout the session, along with the cyclical financial and
energy sectors, which are heavily dependent on a strong economy
for growth.
Traders were betting that incoming U.S. President Joe Biden,
a Democrat, would usher in heftier fiscal stimulus and that a
ramp up in distribution of coronavirus vaccines would boost the
economy, according Michael James, managing director of equity
trading at Wedbush Securities in Los Angeles.
"The financials and cyclicals have been the stars to start
the year," said James. "With the Biden's victory comes stimulus
expectations."
But some investors said they were cautious ahead of earnings
season and due to developments in Washington after supporters of
outgoing U.S. President Donald Trump stormed the Capitol last
week.
As Democrats moved to impeach Trump for inciting the deadly
rampage last week, Trump on Tuesday denied wrongdoing saying
that his public comments on the day of the attack were "totally
appropriate." Also, the Washington Post reported that an FBI office in
Virginia issued an internal warning the day before the Capitol
invasion that extremists were planning to come to Washington and
were talking of "war." These reports "highlight the fact that there's still a lot
of issues in this country and we have a lot of progress to make
before we can really go forward," said Michael O'Rourke, chief
market strategist at JonesTrading in Stamford, Connecticut.
The Dow Jones Industrial Average .DJI rose 60 points, or
0.19%, to 31,068.69, the S&P 500 .SPX gained 1.58 points, or
0.04%, to 3,801.19 and the Nasdaq Composite .IXIC added 36.00
points, or 0.28%, to 13,072.43.
The day the communications services sector .SPLRCL , ending
down 1.5%, was the biggest percentage decliner among the S&P
500's 11 major industry indexes.
Investors worried that social media companies such as
Twitter Inc TWTR.O and Facebook Inc FB.O could come under
increased regulatory scrutiny, according to O'Rourke.
The Capitol attacks highlighted their influence after they
had to ban Trump from their platforms as a result, he said.
But James at Wedbush said investors were simply rotating
their investments.
"The stars of 2020, the tech stocks have been languishing,
as people have been using the tech stocks mostly as a source of
funds and rotating into cyclicals, healthcare and financials,"
James said.
The financials-heavy Russell 2000 which marked its third
closing record in five sessions, has risen 7.7% so far this year
compared with the S&P's 1.2% gain.
Of the major sectors, energy stocks .SPNY lead gainers
with a 3.5% advance as crude prices rose. O/R
The consumer discretionary sector .SPLRCD , closing up
1.3%, showed some of its biggest boosts from carmakers.
Shares in U.S. automaker General Motors Co GM.N closed up
6% after hitting their highest level in a decade after outlining
plans for electric commercial vans to be delivered to FedEx Corp
FD.N by year-end. Also shares of Tesla Inc TSLA.O closed up 4.7% as
investors bet on a big expansion for the electric-car maker
after a it registered a company in India. The S&P financial sector .SPSY , closed up 1% and boasted a
record closing high after trading above its February peak for
the first time on Tuesday.
It was boosted by rate-sensitive banks .SPXBK as benchmark
U.S. Treasury yields reached their highest levels since March
during the session. US/
Investors were also waiting for the fourth-quarter earnings
season to start Friday, with results from JPMorgan JPM.N ,
Citigroup C.N and other big banks.
Advancing issues outnumbered declining ones on the NYSE by a
2.06-to-1 ratio; on Nasdaq, a 2.26-to-1 ratio favored advancers.
The S&P 500 posted 87 new 52-week highs and no new lows; the
Nasdaq Composite recorded 307 new highs and four new lows.
On U.S. exchanges, 15.2 billion shares changed hands
compared with the 12.14 billion average for the last 20
sessions.