US STOCKS-Wall Street gains as markets eye easing of trade tensions

By Johann M Cherian, Sukriti Gupta and Chibuike Oguh

March 5 (Reuters) - Wall Street's main indexes gained in choppy trading on Wednesday, as markets weighed probable easing of trade tensions between the U.S. and its major trading partners.

Stocks lost ground in early trade following mixed economic data as investors also worried about a trade war the day after President Donald Trump imposed 25% tariffs on U.S. imports of goods from Canada and Mexico.

The main indexes turned positive after a report said Trump was considering a one-month delay of auto tariffs on Canada and Mexico. Equities extended gains after a White House announcement confirmed that Trump agreed to delay tariffs on some vehicles.

"We are on the tariff roller coaster," Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey. "The economic data, the Fed, and all that stuff seems to have been pushed to the background for now. It's just a reminder how these policies have an impact in the long run and the markets are reacting to it."

Stocks in materials .SPLRCM, industrials .SPLRCI, consumer discretionary .SPLRCD and communication services .SPLRCL were the main drivers among the 11 sectors on the benchmark S&P 500. Energy .SPNY and utilities .SPLRCU were the biggest losers.

At 2:02 p.m., the Dow Jones Industrial Average .DJI rose 401.32 points, or 0.94%, to 42,922.31, the S&P 500 .SPX gained 50.16 points, or 0.87%, to 5,828.31 and the Nasdaq Composite .IXIC gained 194.02 points, or 1.07%, to 18,479.96.

An ISM report earlier on Wednesday showed an unexpected rise in growth in the services sector in February. However, signs of increased input prices tempered optimism.

Separately, ADP data showed private payrolls increased at the slowest pace in seven months in February, ahead of Friday's crucial payrolls report.

Investors have sold riskier equities over the past few weeks on fears that Trump's trade policies would amplify inflation pressures, slow the economy and eat into corporate profits, at a time when multiple reports have suggested a cooling economy.

"The long-term trend that we were in, which is the rally from the pandemic lows, has basically tapped out and on top of that you put Trump, whose policies - whether it's tariffs, deportations or the extension of the 2017 tax cut - are all going to hurt the economy or cause inflation," said Bill Strazzullo, chief market strategist at Bell Curve Trading in Boston.

Carmaker stocks rose, with Ford F.N up 4.8% and General Motors GM.N up 6.2%. Tesla TSLA.O gained 1%.

Chipmaker Intel INTC.O dropped 4% after Trump said on Tuesday that lawmakers should get rid of a law offering subsidies to the semiconductor industry.

CrowdStrike CRWD.O fell 6.5% after the cybersecurity firm forecast first-quarter revenue slightly below estimates.

Huntington Ingalls HII.N rose 12.7% after Trump said his administration will create an office of shipbuilding in the White House and offer tax incentives.

Advancing issues outnumbered decliners by a 1.67-to-1 ratio on the NYSE. There were 61 new highs and 131 new lows on the NYSE.

The S&P 500 posted one new 52-week high and 8 new lows while the Nasdaq Composite recorded 32 new highs and 148 new lows.