US STOCKS-Wall Street rises with hope of Mexican tariff delay

Sinéad Carew

* Trump to decide on $300 bln China tariffs after G20 summit

* ECB cuts its growth forecasts for 2020, 2021

* Energy stocks gain as oil prices firm

* Indexes up: Dow 0.63%, S&P 0.58%, Nasdaq 0.41 (Updates to late afternoon, adds commentary, New York dateline, changes byline)

New York June 6 (Reuters) - Wall Street's main indexes added to gains in a choppy session on Thursday, as investors showed some optimism on trade after Bloomberg reported that the United States is considering delaying imposing tariffs on Mexican imports.

The report cited unidentified sources saying that U.S. President Donald Trump could delay the tariffs he had threatened to put on Mexican goods as soon as Monday.

This gave investors some hope. But Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey, was cautious.

"When you have a fluid situation like this in terms of the tariffs, it calls for caution and patience on the part of investors," said Krosby.

At 3:17 p.m. ET, the Dow Jones Industrial Average rose 161.08 points, or 0.63%, to 25,700.65, the S&P 500 gained 16.44 points, or 0.58%, to 2,842.59 and the Nasdaq Composite added 31.07 points, or 0.41%, to 7,606.54.

The S&P 500 was on track to register the third straight session of gains for the first time since mid-May.

While investors are hopeful that the U.S. Federal Reserve could be open to cutting interest rates if needed, they were cautious before the U.S. jobs report due on Friday morning.

"There's a recognition that easier monetary policy is likely to prolong this economic cycle and is likely to support higher- than-normal valuation," said Michael Arone, chief investment strategist at State Street Global Advisors.

"But for the market to move materially higher, there's a feeling that trade agreements need to be reached in order to push economic growth higher."

Earlier in the day Trump said he would decide on more tariffs "probably right after the G20" meeting later this month, which followed his warning overnight that he would levy duties on at least another $300 billion worth of Chinese goods.

The trade-sensitive industrial sector pared losses late in the session but was still down 0.2%, making it the biggest decliner among the 11 S&P 500 sectors.

Federal Reserve policymakers have hinted they would be ready to cut rates if the U.S.-China trade spat threatens a decade-long expansion. Since early May, Trump has slapped tariffs on Chinese imports and warned of U.S. levies on Mexico.

Also on Thursday, the European Central Bank's decision not to raise interest rates in the next year led to a flattening of the U.S. Treasury yield curve, which came off its steepest level in seven months the previous day.

The ECB also underscored the threat to global economic expansion from the trade disputes by trimming the region's growth forecasts for the next two years.

The energy sector, which was the hardest hit last month by heightening trade tensions, rose 1.5%, making it the biggest percentage gainer, as crude prices steadied.

Advancing issues outnumbered declining ones on the NYSE by a 1.23-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored decliners.

The S&P 500 posted 79 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 59 new highs and 139 new lows. (Additional reporting by Caroline Valetkevitch in New York, Medha Singh and Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila and Dan Grebler)