UPDATE 1-Goldman raises US software sector to attractive

July 10 (Reuters) - Goldman Sachs upgraded its coverage view on U.S. software sector to "attractive" from "neutral," saying the overall outlook for IT spending looked more encouraging.

Goldman, however, downgraded business software maker CA Inc (CA.O) to "neutral" and replaced it with SuccessFactors Inc (SFSF.O) on its "buy" list.

"CA historically has underperformed in a seasonal rally," the brokerage said. "In reviewing the software rallies from 2002 through 2007, CA underperformed the group in five out of six."

Goldman, which cut its price target on CA by $2 to $22, said currency remains a headwind for CA for the next few quarters, both from a revenue and earnings perspective.

On SuccessFactors, the brokerage said the software maker can benefit earlier in the cycle from some product specific secular tailwinds though it continues to view applications as the lagging element of software spending. The brokerage raised the price target on the stock to $11 from $9.

Shares of CA closed at $16.56 on Nasdaq, while those of SuccessFactors closed at $8.29 Thursday on the New York Stock Exchange. (Reporting by R. Manikandan in Bangalore; Editing by Anil D'Silva)