US STOCKS-Wall Street gains after report of Iran's secret outreach to US
By Johann M Cherian and Ragini Mathur
March 4 (Reuters) - Wall Street indexes rose on Wednesday as investors weighed a report that Iranian operatives secretively reached out to the U.S. to pursue talks to end the conflict, while President Donald Trump's assurance to stabilize oil markets also boosted sentiment.
Investors scooped up tech-related stocks that sold off heavily in February, with Nvidia NVDA.O up 1.6%, Amazon.com AMZN.O adding 3.4% and Applied Digital APLD.O jumping 9.1%.
A New York Times report said Iranian intelligence operatives indirectly reached out to the CIA a day after the attacks, but U.S. officials remain skeptical that either the Trump administration or Iran is prepared for a near-term de-escalation.
Despite the report there is always the possibility of further escalation, Chris Zaccarelli, chief investment officer for Northlight Asset Management, said, adding that U.S. investors have been relatively resilient since the war started.
"Until people think what's happening in the Middle East will cause a recession, they're giving stocks the benefit of the doubt."
Travel stocks that took a hit earlier in the week on higher oil prices were mixed on Wednesday.
American Airlines AAL.O and Norwegian Cruise NCLH.N were up around 2% each, while Royal Caribbean RCL.N lost 1.8%.
On the other hand, oil and gas producers such as ConocoPhillips COP.N and Cheniere Energy LNG.N declined 2.8% and 0.8%. The energy sector .SPNY led declines on the S&P 500 with a 1.4% fall.
Several Middle Eastern countries have temporarily halted oil and gas production and the U.S. was looking to expand its campaign inside Iran.
However, President Trump's announcements of a U.S. naval escort for oil tankers through the Strait of Hormuz and political risk insurance brought some relief.
New York Fed President John Williams also said on Tuesday the U.S. economy has proved to be resilient to energy price shocks. The U.S. oil-price benchmark CLc1 was last at $74, while Brent prices LCOc1 stood at $81.
At 11:53 a.m. ET, the Dow Jones Industrial Average .DJI rose 324.35 points, or 0.67%, to 48,824.77, the S&P 500 .SPX gained 59.90 points, or 0.88%, to 6,876.53 and the Nasdaq Composite .IXIC gained 327.79 points, or 1.45%, to 22,843.24.
The CBOE volatility index, also known as Wall Street's fear gauge .VIX, dropped 2.86 points to 20.7, while the rate-sensitive Russell 2000 index .RUT added 1%.
Policymakers have offered mixed views on the impact the conflict will have on the Federal Reserve's monetary policy outlook, while Goldman Sachs GS.N CEO David Solomon said markets may take a while to fully digest the repercussions.
Investors have pushed back expectations for a 25-basis-point interest rate cut to September from July.
Traditional safe-havens such as precious metals gained. Miner Endeavour Silver EXK.N was up 4.6%.
Crypto stocks such as Strategy MSTR.O and Coinbase COIN.O added about 12% and 15%, respectively, tracking a 7.6% jump in bitcoin BTC=.
Drugmaker Moderna MRNA.O added 8.5% after agreeing to pay up to $2.25 billion to settle a long-running legal fight over a COVID-19 vaccine patent.
Meanwhile, a private survey showed private payrolls increased more than expected in February, while a separate report pointed to strong services activity.
The Fed's Beige Book, a district-by-district snapshot of economic conditions, is due later in the day.
Advancing issues outnumbered decliners by a 1.83-to-1 ratio on the NYSE and by a 2.58-to-1 ratio on the Nasdaq.
The S&P 500 posted nine new 52-week highs and three new lows, while the Nasdaq Composite recorded 56 new highs and 63 new lows.
