GLOBAL MARKETS-Stocks rise on ceasefire relief, oil gains as truce is tested

By Stephen Culp

NEW YORK, April 22 (Reuters) - Wall Street stocks advanced on Wednesday following U.S. President Donald Trump's unilaterally declared ceasefire extension, and oil resumed its upward climb after Iran challenged the fragile truce by seizing two cargo ships in the Strait of Hormuz.

All three major U.S. stock indexes were lifted by a broad rally, while gold advanced and U.S. Treasury yields dipped.

"Things are kind of quieting down, and (investors) can focus on the economy and earnings for a little while, and not worry about bombs flying in the Middle East for now," said Paul Nolte, senior wealth advisor & market strategist at Murphy & Sylvest in Elmhurst, Illinois. "There's still some concern that, yes, there's a ceasefire, but it's not resolved.

"All it does is postpone a decision."

Iran's Revolutionary Guards seized two vessels for maritime violations just hours after Trump agreed to extend the ceasefire until negotiations are concluded.

U.S. stocks, initially battered by the war on Iran, have since made a full recovery, with the S&P 500 and the Nasdaq having reached all-time closing highs in recent sessions. But geopolitical uncertainty lingers and a prolonged period of elevated oil prices remains a threat; about two-thirds of the S&P 500 companies that have reported quarterly earnings since the beginning of April have voiced concerns about energy prices in their analyst conference calls, according to a Reuters review of transcripts.

First-quarter earnings season is well underway amid lofty expectations. Analysts currently estimate year-on-year S&P 500 earnings growth of 14.4% for the January-March period, according to the most recent LSEG data.

But the first quarter predates the Iran war.

"I don't think we're going to feel the war's full impact on earnings until we get second quarter reports in July," Nolte added.

The Dow Jones Industrial Average .DJI rose 364.21 points, or 0.75%, to 49,513.59, the S&P 500 .SPX rose 59.43 points, or 0.84%, to 7,123.44 and the Nasdaq Composite .IXIC rose 283.12 points, or 1.17%, to 24,543.08.

European shares were slightly lower following the extension of the U.S.-Iran truce as Middle East strife continued to weigh on markets and investors assessed corporate earnings.

Dozens of international firms have withdrawn guidance or signaled price hikes since the conflict began.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 3.98 points, or 0.37%, to 1,070.44.

The pan-European STOXX 600 .STOXX index fell 0.23%, while Europe's broad FTSEurofirst 300 index .FTEU3 fell 6.06 points, or 0.25%.

Emerging market stocks .MSCIEF fell 8.34 points, or 0.52%, to 1,607.14. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed lower by 0.57%, to 822.53, while Japan's Nikkei .N225 rose 236.69 points, or 0.40%, to 59,585.86.

The dollar inched higher against the euro amid lingering geopolitical worries.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.06% to 98.44, with the euro EUR= down 0.11% at $1.1728.

Against the Japanese yen JPY=, the dollar weakened 0.09% to 159.23.

In cryptocurrencies, bitcoin BTC= gained 3.97% to $78,750.99. Ethereum ETH= rose 3.57% to $2,400.37.

U.S. Treasury yields dipped as investors remained cautious following the ceasefire extension.

The yield on benchmark U.S. 10-year notes US10YT=RR fell 0.6 basis points to 4.286%, from 4.292% late on Tuesday.

The 30-year bond US30YT=RR yield fell 0.9 basis points to 4.8887% from 4.898% late on Tuesday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.3 basis points to 3.792%, from 3.779% late on Tuesday.

Oil prices moved higher following reports of attacks on container ships in the Strait of Hormuz.

U.S. crude CLc1 rose 2.09% to $91.54 a barrel and Brent LCOc1 rose to $100.58 per barrel, up 2.15% on the day.

Gold prices rose as geopolitical uncertainties eased, reducing liquidation pressure on the metal.

Spot gold XAU= rose 0.45% to $4,732.98 an ounce. U.S. gold futures GCc1 rose 0.93% to $4,742.20 an ounce.