UPDATE 2-Goldman raises US specialty chemical sector

(Adds details, updates stock movement)

May 15 (Reuters) - Goldman Sachs upgraded the U.S. specialty chemical sector to "attractive" from "neutral," citing a more constructive outlook for the global economy.

"We have increased confidence that the global economy is approaching bottom and green shoots of a cyclical rebound are emerging," analyst Robert Koort said.

The analyst cited stabilizing demand and customer inventory rebuilds in markets such as housing and electronics, easing credit conditions and positive macro economic data from China, the United States and UK for his global economic outlook.

The analyst added paint and coatings maker Valspar Corp (VAL.N) to the Americas Conviction Buy List, as he sees a "meaningful" earnings rebound for the company, helped by its exposure to the Chinese market and falling raw material costs.

Koort downgraded Ecolab Inc (ECL.N), a provider of cleaning supplies and services, to "neutral" from "buy," as he expects other specialty chemical companies to outperform Ecolab over the next several quarters.

However, Ecolab should remain a core holding for long-term growth investors, he said.

Koort removed paint maker Sherwin-Williams Co (SHW.N) from the Americas Sell List and replaced it with Cytec Industries Inc (CYT.N).

The analyst upgraded Sherwin-Williams to "neutral" from "sell," saying recent positive developments in the U.S. housing market and low raw material costs could drive fundamental improvement as the year progresses.

Top picks in the sector are Air Products and Chemicals Inc (APD.N), Nalco Holding Co (NLC.N) and Albemarle Corp (ALB.N), he said.

Shares of Valspar were trading up 4 percent at $23.59, while those of Ecolab were down 2 percent at $36.14 Friday afternoon on the New York Stock Exchange. (Reporting by Mary Meyase in Bangalore; Editing by Anne Pallivathuckal)