Bank of America, whose shares fell 14% in the week through yesterday, led U.S. banks higher in New York trading after analysts upgraded the stock.

Shares of the company rose 4.6% at 10:43 a.m. in New York, the biggest increase in the 88-company Standard & Poor's 500 Financials Index. JPMorgan Chase, the largest U.S. bank by assets, climbed 3.7% after CLSA Ltd. raised its recommendation to buy.

The gains mirrored a comeback on global stock markets Tuesday, which climbed after China lowered interest rates to boost economic growth. The S&P 500 Index, which entered a correction yesterday, rallied with commodities and emerging- market currencies.

"We believe BAC has some levers to lean on," John McDonald and Grant D'Avino, analysts at Sanford C. Bernstein, said in a report Tuesday, referring to Bank of America by its ticker symbol. In raising the shares to buy from hold, they cited the opportunity for more cost cuts, strong capital levels and the "solid" U.S. economy. Monday's 5% decline made Charlotte, North Carolina-based Bank of America more attractive from a risk-reward standpoint, McDonald and D'Avino wrote.

David Konrad, an analyst at Macquarie Group Ltd., raised BofA to neutral from underperform, saying the valuation "no longer implies outsized benefit from higher rates."

JPMorgan's performance reminded CLSA of a professional athlete.

"Like the basketball player LeBron James, JPM is good at both offense and defense," Mike Mayo and Chris Spahr, analysts at CLSA, wrote in their note. Morgan Stanley, which slipped 5.7% Monday, advanced 2.8% to $33.16 after Buckingham Research Group upgraded the New York-based firm to buy from hold. The sell-off Monday raised speculation that the Federal Reserve may delay lifting its benchmark interest rate. Goldman Sachs Group Inc. said policy makers might wait after China's decision to devalue its currency sparked worldwide declines in stocks and commodities.

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