* U.S. services sector growth rate at three-month low -ISM
* Tesla rallies after first-quarter sales data
* Indexes up: Dow 0.71 pct, S&P 0.72 pct, Nasdaq 0.56 pct (Updates to midday)
By Rodrigo Campos
NEW YORK, April 6 (Reuters) - U.S. stocks rose on Monday as expectations the Federal Reserve will push any interest rate increases further into the year offset concerns over faltering economic growth spurred by a surprisingly weak jobs report on Friday.
Labor Department data showed U.S. employers last month added 126,000 jobs, the lowest in more than a year and well below expectations.
On Monday, New York Fed President William Dudley said the central bank will need to determine whether that jobs report foreshadows a more substantial slowing in the labor market, adding he expects the path of rate hikes to be “relatively shallow.”
“That’s why they took it as dovish,” said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, of the market reaction to Dudley’s words. “Traders are taking advantage of headlines to move the market around.”
In other economic news, ISM data showed the pace of growth in the U.S. services sector fell in March to its lowest level in three months, while a measure from Markit showed the sector expanded in March at its fastest pace since August.
Investors are concerned that a recent spate of soft economic data, including jobs, factory activity and consumer spending, may point to more than a weather-related slowdown and could indicate a loss of momentum in the U.S. economy.
Still, the lackluster data also eased some concerns over the U.S. dollar continuing to strengthen and pressure the earnings of companies with international exposure.
At noon on Wall Street (1600 GMT), the Dow Jones industrial average rose 126.56 points, or 0.71 percent, to 17,889.8, the S&P 500 gained 14.98 points, or 0.72 percent, to 2,081.94 and the Nasdaq Composite added 27.58 points, or 0.56 percent, to 4,914.52.
Utilities, preferred by safety-seeking investors when Treasury yields fall, were the best performer of the 10 S&P 500 sectors. Energy followed, helped by a more than 5 percent jump in oil futures after Saudi Arabia raised its price for sales to Asia and estimates for crude buildups fell.
U.S.-listed shares of Amsterdam-based Uniqure jumped 46.6 percent to $33.51 after a deal with Bristol-Myers Squibb to develop gene therapies for cardiovascular diseases.
Tesla Motors added 7.5 percent to $205.36 after it reported a 55 percent increase in deliveries in the first quarter.
Advancing issues outnumbered declining ones on the NYSE by 2,256 to 727, for a 3.10-to-1 ratio; on the Nasdaq, 1,459 issues rose and 1,146 fell for a 1.27-to-1 ratio.
The benchmark S&P 500 index was posting 20 new 52-week highs and 3 new lows; the Nasdaq Composite was recording 51 new highs and 21 new lows. (Editing by Bernadette Baum)