Wall St rebounds on bank shares

Stocks rebounded on Tuesday from a 10-month low on the S&P 500 on data that showed the services sector, the economy's largest, grew for a sixth straight month in June.

Bank stocks were among the top gainers, taking their cue from Christian Noyer, a member of the European Central Bank Governing Council. Noyer said French banks are likely to pass stress tests designed to reassure markets that banks were healthy.

Bank of America Corp rose 2 percent to $14.11 and the KBW bank index <.BKX> gained 2.6 percent.

Data showed the U.S. services sector grew last month, helping to ease fears of a contraction in the economy.

With stock valuations being so oversold, the data is helping (the U.S. stock market) follow what we're seeing overseas, said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.

The Dow Jones industrial average <.DJI> gained 73.15 points, or 0.76 percent, to 9,759.63. The Standard & Poor's 500 Index <.SPX> rose 8.64 points, or 0.84 percent, to 1,031.22. The Nasdaq Composite Index <.IXIC> added 14.74 points, or 0.70 percent, to 2,106.53.

Stocks lost steam in the early afternoon. Advancers beat decliners by about 5 to 2 on the NYSE compared with a nearly 7-to-1 ratio following the market open.

The S&P 500 hit a 10-month closing low on Friday after falling for 9 out of the 10 previous sessions.

Halliburton Co firmed 3.2 percent at $26.55 and an oil services sector index <.OSX> jumped 2.5 percent after Barclays Capital upgraded the sector.

Chipmaker shares were boosted by a report showing worldwide semiconductor sales rose 4.5 percent in May from April. SanDisk Corp gained 2.9 percent to $42.66 and a sector index <.SOXX> added 1.6 percent.

Goldman Sachs Group Inc rose 1.9 percent to $133.55 following an upgrade by JPMorgan, who said the company was the best in its class at managing risk.

British oil company BP ruled out a share issue amid talk of sovereign wealth fund interest in a stake, boosting its shares even as the Gulf of Mexico oil slick spread to the Texas coast.

BP's New York-traded stock gained 6.8 percent to $31.35.

Despite Tuesday's advance, the S&P 500's 50-day simple moving average confirmed its break below the 200-day simple moving average, an occurrence known by chartists as a death cross, seen as a harbinger of further downward pressure.

(Reporting by Rodrigo Campos; Editing by Kenneth Barry)