* Shares bounce back from Tuesday lows
* Staples, Costco rise after Goldman upgrades
* Indexes up: Dow 0.7 pct; S&P 0.9 pct; Nasdaq 1.1 pct (Updates to midday)
By Caroline Valetkevitch
NEW YORK, Sept 8 (Reuters) - U.S. stocks rose on Wednesday as worries about Europe's banking system decreased, easing risk aversion.
U.S. bank stocks recovered from Tuesday's losses following a bounce in European bank shares. JPMorgan Chase and Co gained 2.7 percent to $39.32, while the S&P financial sector index rose 1.6 percent.
A successful Portuguese debt offering helped market sentiment, along with news from Ireland's finance ministry that nationalized lender Anglo Irish Bank would be split to wind down its assets. The euro recovered against the dollar and yen following the news.
The Federal Reserve was due to release its Beige Book, the anecdotal reports from its 12 regional banks that could offer insights into U.S. economic conditions. The report was due at 2 p.m. (1800 GMT) on Wednesday.
"Overall we're still locked in a fairly narrow trading range, and that's consistent with the jerky pattern of how the economy here and in developing worlds is unfolding," said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.
The Dow Jones industrial average was up 71.41 points, or 0.69 percent, at 10,412.10. The Standard & Poor's 500 Index was up 9.43 points, or 0.86 percent, at 1,101.27. The Nasdaq Composite Index was up 24.13 points, or 1.09 percent, at 2,233.02.
On Tuesday, stocks fell in light volume as investors seized on renewed concerns about European banks' exposure to sovereign debt to sell shares after strong gains last week.
U.S.-traded shares of BP Plc rose 3.3 percent at $38.40 after it issued an internal report on the rig explosion that led to the worst U.S. oil spill ever and the death of 11 crew members.
BP deflected much of the blame, claiming drilling contractor Transocean Ltd missed danger signs and criticized the cementing of the well conducted by Halliburton Co. Transocean gained 2.1 percent to $54.14, while Halliburton added 1.4 percent to $30.25.
Staples Inc was up 2.3 percent to $19.10, and Costco Wholesale Corp rose 0.6 percent to $58.99 after Goldman Sachs upgraded their stocks. (Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)