The S&P 500 and Nasdaq rose modestly on Tuesday as the banking sector got a lift from positive analyst comments, while minutes from the Federal Reserve's last meeting eased concern over rising rates.

The minutes suggested the central bank could keep interest rates at ultra-low levels longer than investors have anticipated if the economy worsens. Lower rates support financial shares, which have been at the center of the market's year-long rally.

Bank of America rose 2 percent to $18.49 and JPMorgan Chase & Co added 1.1 percent to $45.84 amid the sector's strong gains. Wells Fargo Securities upgraded large-cap U.S. banks, citing more clarity on asset-quality trends.

The three major U.S. stock indexes moved in a tight range, but perked up after the release of the Fed minutes at 2 p.m.

The crisis seems to be contained, but there is still enough uncertainty and enough high unemployment that the Fed looks like they will have loose monetary policy for an extended period of time, said Doug Roberts, chief investment strategist at Channel Capital Research.com, in Shrewsbury, New Jersey.

The Dow fared worse than the other indexes to end just below break-even as Travelers Companies Inc fell after Sandler O'Neill cut its rating to hold from buy. The stock was down 1.4 percent at $52.59.

The Dow Jones industrial average <.DJI> eased 3.56 points, or 0.03 percent, to end at 10,969.99, after a brief foray into positive territory following the Fed's minutes. But the Standard & Poor's 500 Index <.SPX> added 2.00 points, or 0.17 percent, to 1,189.44. The Nasdaq Composite Index <.IXIC> rose 7.28 points, or 0.30 percent, to 2,436.81.

Earlier, the S&P 500 hit an 18-month intraday high at 1,191.80, and the Nasdaq touched a 19-month intraday high at 2,443.50.

Regional banks' shares rose after Credit Suisse increased its price target on two smaller banking companies, Regions Financial Corp and Synovus Financial Corp .

Regions Financial gained 4.4 percent to $8.55, while Synovus Financial advanced 6.2 percent to $3.62. The KBW regional banks index <.KRX> rose 3.1 percent, closing at its highest level since early January 2009.

The Nasdaq garnered support from Amazon.com , up 3.1 percent at $135.56. The launch of Apple Inc's iPad has stirred optimism the device could expand the market for e-publishing, including Amazon.com's Kindle.

Home builders' stocks slid as rising Treasury yields raised worries about higher mortgage rates, while KB Home fell 2.8 percent to $16.51 after Credit Suisse cut its rating on the company's stock to neutral from outperform.

Higher mortgage rates would pose a significant hurdle for a recovery in the housing sector. The 10-year Treasury note's yield reached 4 percent in intraday trade on Monday, though its yield eased to 3.97 percent on Tuesday as bargain hunters stepped in to buy some debt.

(Reporting by Leah Schnurr; Additional reporting by Chuck Mikolajzcak; Editing by Jan Paschal)

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