Wall Street starts third quarter with gains

US stocks are starting the third quarter on a positive note on Tuesday, rising in early trading after a report showed China's factory sector expanded in June for the first time in six months.

Closer to home, investors are looking ahead to two reads on domestic manufacturing that are also expected to show growth.

Analyst commentary is sparking some of the biggest moves on the day, with Netflix Inc, the S&P 500's biggest gainer, up 3.6% to $456.50 after Goldman Sachs upgraded the stock to "buy" from "neutral." With the day's move, the online movie renter has extended its year-to-date advance to 24%.

On the downside, Urban Outfitters Inc is down 2.6% to $33.05 after Wedbush cut the stock to "neutral" from "outperform." The stock is the biggest decliner on the S&P 500.