US STOCKS-Wall Street higher but gains seen as ephemeral

* Quick fade to rally another sign of persisting caution

* July new home sales data on tap, seen flat with June

* Investors await Bernanke's Friday speech in Wyoming

* Indexes up: Dow 0.3 pct, S&P 0.3 pct, Nasdaq 0.5 pct

* For up-to-the-minute market news see [STXNEWS/US] (Updates to open)

By Ryan Vlastelica

NEW YORK, Aug 23 (Reuters) - U.S. stocks rose on Tuesday, but a rally from premarket trading faded for a second consecutive day, a sign the recent bout of selling may not yet be exhausted.

Gauges of Chinese and euro zone economic activity came in less gloomy than feared, lifting stocks, but some questioned whether trading could follow Monday's path, where early advances ended with only modest gains in indexes.

"Today's gain isn't sustainable. This is exactly what we saw yesterday, and the data from overseas wasn't fantastic enough to generate" the rise indicated by futures said Phil Streible, senior market strategist with MF Global in Chicago.

Bank of America Corp , fell 1.2 percent to $6.34 in early trading.

While reads on China's factory sector and German business activity pointed to slowing growth, the slowdown wasn't as harsh as some had feared. For details, see [ID:nL4E7JN0JB] [ID:nL9E7I401I]

The Dow Jones industrial average <.DJI> was up 36.18 points, or 0.33 percent, at 10,890.83. The Standard & Poor's 500 Index <.SPX> was up 2.85 points, or 0.25 percent, at 1,126.67. The Nasdaq Composite Index <.IXIC> was up 12.42 points, or 0.53 percent, at 2,357.80.

Volatility continues to plague markets as investors find few reasons to buy ahead of comments from Federal Reserve Chairman Ben Bernanke at an annual central bank conference in Jackson Hole, Wyoming, on Friday.

Some have speculated Bernanke could unveil fresh measures to revive a struggling U.S. economy, though he is most likely to outline gradual measures, which would disappoint those looking for something as dramatic as a third round of quantitative easing.

"The market is putting too much expectation on Jackson Hole, and while Bernanke can say something that would stabilize markets, prospects for (more monetary stimulus) are slim to none," Streible said.

July U.S. new home sales, scheduled for release at 10:00 a.m. [1400 GMT], will give new insight into the state of the fragile housing sector. Sales are forecast at about 310,000 homes, roughly flat with June.

UBS AG plans to slash around 3,500 jobs in a cost-cutting measure. U.S.-listed shares rose 2.4 percent to $13.50. [ID:nL5E7JN076]

Goldman Sachs Group Chief Executive Lloyd Blankfein hired Reid Weingarten, a high-profile Washington defense attorney, a government source familiar with the matter said late on Monday. Investigations of Goldman and its role in the 2007-2009 financial crisis continue. The stock fell 1 percent to $105.49. [ID:nN1E77L1G9] (Editing by Padraic Cassidy)