* FTSEurofirst 300 up 0.5 percent
* Euro STOXX 50 moves above 200-day moving average
* Alcoa's results fuel earnings optimism
* Banking stocks bounce back, boosted by bullish notes
* For up-to-the-minute market news, click on [STXNEWS/EU]
By Blaise Robinson
PARIS, Jan 11 (Reuters) - European stocks rose in early
trade on Tuesday, snapping a three-day losing streak, as
forecast-beating results from U.S. aluminium major Alcoa
German conglomerate Siemens
News that Japan was considering buying about 20 percent of euro zone bonds, to be jointly issued later in January to raise funds to support debt-swamped Ireland, also helped reassure investors. [ID:nL3E7CB076]
At 0942 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.5 percent at 1,139.19 points, rebounding after a 1 percent drop on Monday.
The euro zone's blue chip Euro STOXX 50 <.STOXX50E> index was up 0.3 percent, at 2,769.52 points, moving above its 200-day moving average, hit on Monday.
The index's next resistance level is at 2,805.95 points, the 61.8 percent Fibonacci retracement of the index's drop from last April's high to a May low.
"The focus is switching to companies' results this week,
with earnings due from big U.S. names such as JPMorgan
Euro zone struggles with debt http://r.reuters.com/hyb65p
Banking stocks were among the top gainers on Tuesday, as upbeat research notes helped the sector rebound after recent sharp losses.
HSBC
"It is profitability rather than the capital structure that drives share prices. An investment strategy based on avoiding the weakest capitalised banks performed poorly in 2010," Societe Generale analysts wrote in a note.
"Indeed, rather than strong capitalisation, it was banks that reported an improvement in RoRWA (return on risk weighted assets) that saw expansion in their price/book multiple. We expect this theme to continue."
Investors remained cautious, however, ahead of this week's key government bond auctions in the euro zone.
Investors awaited to see if Lisbon will be able to raise funds in the debt market at a sustainable cost on Wednesday or ultimately have to turn to the EU and IMF for financial aid.
The premium investors demand to hold bonds issued by Spain, Italy and Belgium, rather than low risk German Bunds pushed wider on Tuesday, and Portuguese 10-year yields remained above 7 percent, a level seen as an unsustainable cost of financing.
While the FTSEurofirst 300 has gained 1.6 percent since the beginning of the year, Spain's IBEX 35 <.IBEX> has lost 4.1 percent and Portugal's PSI20 <.PSI20> has fallen 3 percent so far in 2011. (Reporting by Blaise Robinson; Editing by Mike Nesbit)