Oil Surges, Stocks End Lower on Worries About Tenuous US-Iran Ceasefire

• Oil prices rebound as key Strait of Hormuz remains closed
• Nasdaq snaps longest winning streak since 1992
• Equities dip as concerns over Mideast ceasefire grow
• Selling remains modest, with investors in watch-and-wait mode

By Stephen Culp

NEW YORK, April 20 (Reuters) - Wall Street pulled back from record highs on Monday and oil prices spiked as increasing tensions over the crucial Strait of Hormuz raised concerns that the fragile U.S.-Iran ceasefire might not hold.

All three major U.S. stock indexes lost ground, and the Nasdaq closed the book on a 13-day winning streak, its longest since January 1992.

The equity-market losses were shallow, held in check by hopes that a deal will eventually be reached, and ongoing optimism over solid first-quarter corporate earnings, and other markets, such as the dollar and U.S. Treasuries, were also subdued.

"We're not seeing a lot of selling pressure develop because the action that the market saw last week highlighted the importance of staying invested," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "The opportunity potentially missed by being out of the market is probably keeping a lid on the losses today."

"Everybody knows that the war could change on a dime," Pavlik added.

The uneasy ceasefire between the United States and Iran frayed after the U.S. announced it had seized an Iranian cargo ship, prompting vows of retaliation from Iran, which over the weekend said it would not participate in a second round of negotiations. A senior Iranian official later told Reuters that the country is considering sending representatives to talks that are expected to take place in Islamabad.

Those fears reignited a rally in crude oil prices with traffic through the Strait of Hormuz still largely halted. U.S. crude CLc1 rose 6.9% to settle at $89.61 per barrel, while Brent LCOc1 settled at $95.48 per barrel, up 5.6%.

The Dow Jones Industrial Average .DJI fell 4.74 points to 49,442.69, the S&P 500 .SPX fell 16.89 points, or 0.2%, to 7,109.17 and the Nasdaq Composite .IXIC fell 64.09 points, or 0.3%, to 24,404.39.

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 2.37 points to 1,072.39. The pan-European STOXX 600 .STOXX and Europe's broad FTSEurofirst 300 index .FTEU3 each fell 0.8%.

An index of emerging market stocks .MSCIEF rose 5.64 points, or 0.4%, to 1,602.77. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed higher by 0.6%, while Japan's Nikkei .N225 rose 348.99 points, or 0.6%, to 58,824.89.

U.S. benchmark Treasury yields edged higher in subdued trading. The yield on benchmark U.S. 10-year notes US10YT=RR rose 1.4 basis points to 4.258% from 4.244% on Friday.

The 30-year bond US30YT=RR yield rose 0.3 basis points to 4.8877% while the 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.5 basis points to 3.725%.

The dollar reversed earlier gains on optimism that the ceasefire will hold, despite renewed tensions. The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.4% to 98.07, with the euro EUR= up 0.2% at $1.1785. Against the Japanese yen JPY=, the dollar strengthened 0.1% to 158.83.

Bitcoin BTC= gained 2% to $76,169.97. Ethereum ETH= rose 2.2% to $2,332.09.

Spot gold XAU= fell 0.3% to $4,815.29 an ounce. U.S. gold futures GCc1 fell 1% to $4,807.20 an ounce.

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Global asset performance YTD