US STOCKS-Wall Street gains as investors welcome Mideast resolution prospects
By Purvi Agarwal and Avinash P
April 6 (Reuters) - Wall Street's main indexes kicked off the week on a higher note on Monday after marking their biggest weekly jump in four months in the previous session, while investors assessed prospects of an end to the Middle East conflict.
Iran conveyed its response to the U.S. proposal for ending the war to Pakistan, rejecting a ceasefire and emphasizing the necessity of a permanent end to the war, the official IRNA news agency said, ahead of U.S. President Donald Trump's Tuesday deadline to reopen the Strait of Hormuz.
Still, investors drew some comfort from a report that indicated the U.S., Iran and a group of regional mediators are discussing the terms for a potential 45-day ceasefire.
"The optimism is coming from talks about a ceasefire in Iran. March was a tough month for stocks and investors really just want to find a reason to be optimistic," said Melissa Brown, managing director of investment decision research at SimCorp.
"That's the driver of today's optimism but could turn into tomorrow's concern quickly."
The S&P 500 financial index .SPSY was the biggest boost, up 0.7%, with JPMorgan Chase JPM.N and Visa V.N in the lead. These stocks also lifted the blue-chip Dow.
Tech stocks followed, with chip-linked firms among the top gainers. Memory chipmaker Seagate STX.O rose 6.6% after Morgan Stanley added it to its top-pick list. The Philadelphia SE Semiconductor index .SOX was up 0.9%.
"The expectation is that tech earnings will continue to be good ... if the stocks have been beaten down, maybe this is a buying opportunity," said Brown.
Mining .SPLRCM and healthcare .SPXHC stocks fell 0.6% and 0.3%, respectively, capping gains.
At 11:50 a.m. ET, the Dow Jones Industrial Average .DJI rose 83.20 points, or 0.18%, to 46,587.48, the S&P 500 .SPX gained 16.71 points, or 0.25%, to 6,599.40 and the Nasdaq Composite .IXIC gained 88.32 points, or 0.40%, to 21,967.50.
Trading volumes on Monday were expected to be thin as many markets in Europe and Asia are closed for public holidays.
Wall Street's main indexes posted their first weekly gains in six weeks on Thursday, as the prospects of an end to the conflict soothed investor nerves.
Markets will scrutinize domestic inflation readings this week to gauge if the conflict-driven spikes in energy prices have trickled into the U.S. economy.
Friday's data showed U.S. job growth rebounded more than expected in March, helping the Federal Reserve to focus on its inflation mandate.
Money market participants are not pricing in any easing from the central bank this year, compared to two cuts they had expected before the war broke out, per CME Group's FedWatch Tool.
On Monday, the Institute for Supply Management's non-manufacturing purchasing managers' index for March came in at 54, slightly below estimates of 54.9, according to economists polled by Reuters.
Among others, Soleno Therapeutics SLNO.O shares surged about 32% after Neurocrine Biosciences NBIX.O agreed to acquire the rare-disease drugmaker for $2.9 billion in cash.
U.S.-listed shares of cryptocurrency-linked firms rose, with Coinbase COIN.O and Strategy MSTR.O up 2.8% and 5.7%, respectively, as bitcoin BTC= prices edged higher.
Advancing issues outnumbered decliners by a 1.44-to-1 ratio on the NYSE and by a 1.74-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and one new low, while the Nasdaq Composite recorded 46 new highs and 50 new lows.
