* Consumer confidence highest since January
* Six of 10 S&P sectors up
* Health care index bounces back
* Indexes up: Dow 0.35 pct, S&P 0.38 pct, Nasdaq 0.13 pct (Adds quote, updates prices)
By Sweta Singh
Sept 29 (Reuters) - U.S. stocks gave up some of their early gains in afternoon trading on Tuesday as investors remained cautious amid lingering concerns about the health of the global economy.
A rebound in health care stocks, which looked set to snap a 7-day losing streak, provided some succor to investors worried about a China-led global slowdown.
Global stocks touched a two-year low on Tuesday as the outlook for raw materials prices and emerging markets remained soft.
“Investors are still very nervous on the global markets,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
“I think it’s buying of what has done poorly and selling of what has done well in the last two-three days - a little bit of bargain hunting, a little bit of taking advantage.”
Six of the 10 S&P sectors were up, with health care index leading the advancers.
The sector had been under pressure after Democratic presidential candidate Hillary Clinton criticized drug pricing last week. Johnson & Johnson and Gilead Siences provided the biggest boost to the index.
“There are a lot of balls juggling at the moment. When you have uncertainty investors become less confident and less likely to make stand and commit in a big way,” said Gordon Charlop, a managing director at Rosenblatt Securities in New York.
At 14:00 a.m. ET (1800 GMT), the Dow Jones industrial average was up 56.79 points, or 0.35 percent, at 16,058.68, the S&P 500 was up 7.11 points, or 0.38 percent, at 1,888.88 and the Nasdaq composite was up 5.82 points, or 0.13 percent, at 4,549.79.
“I think it’s just more of a relief rally and it’s going to be important to see the market hold the rally and maybe even improve as we go through the day,” Nolte said.
Investors are keeping an eye on data scheduled to be released this week, culminating in nonfarm payrolls numbers on Friday.
Data on Tuesday showed the consumer confidence index rose to 103.0, topping economists’ expectation of 96.1.
With third-quarter earnings season looming, Goldman Sachs said on Tuesday it expects sales growth for S&P 500 companies to shrink this year for the first time in five years.
U.S. companies reporting quarterly earnings on Tuesday include Costco and Diamond Foods.
Yahoo shares rose 2.8 percent to $28.38 on Tuesday, a day after the Internet company’s board decided to proceed with spinning off Alibaba stake.
Nexstar rose 6.4 percent to $46.29 after activist investor Starboard Value LP urged regional TV company Media General to sell itself to Nexstar. [ID: nL3N11Z4EU]
Republic Airways was up 10.8 percent at $5.86 after Deutsche Bank raised the stock to “buy” and the airline reached agreement on new contract with its pilots.
Shares of Phoenix Cos more than doubled to $32.80 after the life insurer agreed to be taken private by Nassau Reinsurance.
Declining issues outnumbered advancing ones on the NYSE by 1,548 to 1,462. On the Nasdaq, 1,526 issues fell and 1,241 advanced.
The S&P 500 index showed one new 52-week high and 58 new lows, while the Nasdaq recorded 13 new highs and 254 new lows. (Reporting by Abhiram Nandakumar and Sweta Singh in Bengaluru; Editing by Saumyadeb Chakrabarty)