(Updates prices to late afternoon)

* Indexes: Dow down 0.28%, S&P 500 up 0.23%, Nasdaq up 0.54%

* Domino's Pizza gains after Q2 revenue beat

* Alphabet rises after report that it is building new AI

chips

* Alphabet, Tesla and Intel ( INTC ) to report earnings later in the

week

By Sinéad Carew and Ragini Mathur

July 20 (Reuters) - The S&P 500 and Nasdaq rose on Monday as

chip stocks recovered some of their prior-week losses and

investors looked for moves toward Middle East de-escalation

while they waited for earnings reports due from major technology

companies later in the week.

Yemen's Iran-aligned Houthis said on Monday that they were

imposing a naval blockade on Saudi Arabia, opening a new front

in the U.S.-Iran war and widening the threat to global energy

supplies and trade beyond the Gulf. But on the same day a senior

Iranian official told Reuters that mediators have passed Iran a

proposal to de-escalate the war with the U.S. that would offer a

10-day ceasefire to find ways to revive an interim deal reached

last month.

After more than a week of bombing in the region, Joe Quinlan,

head of CIO market strategy for Merrill and BofA Private Bank,

said that investors were anxious for any efforts toward a Middle

East resolution that could potentially re-open the Strait of

Hormuz and improve oil supplies and prices.

"The hope is if you get some type of resolution - less bombing,

more talk in the Middle East - that oil prices and gasoline

prices would not go as high as we saw earlier this year and

therefore, alleviate some of that pressure on consumer prices,"

Quinlan said.

While investors appeared to be seeking bargains in the chip

sector after last week's sharp selloff, Quinlan added that they

may be positioning themselves ahead of earnings.

The second-quarter earnings season will pick up pace this week,

with results due from big names like Alphabet, Tesla

, Intel ( INTC ) and IBM ( IBM ).

Markets are expecting S&P 500 earnings growth of 26% for the

second quarter year on year, up from an earlier estimate of

23.7%, according to data compiled by LSEG.

In particular, investors will monitor results from chipmakers

such as Intel ( INTC ) and Texas Instruments ( TXN ) for any encouraging

signs after the Philadelphia SE Semiconductor Index ended

Friday more than 20% below its late-June record high, confirming

a bear-market decline. The chip index was up 1.6% on Monday.

On Monday at 2:21 p.m., the Dow Jones Industrial Average

fell 143.74 points, or 0.28%, to 52,002.68, the S&P 500

gained 17.49 points, or 0.23%, to 7,474.82 and the Nasdaq

Composite gained 138.54 points, or 0.54%, to 25,658.78.

Among the S&P 500's 11 major industry sectors just three

were gaining on Monday, including energy and the

heavyweight technology and communications services

sectors.

Alphabet, up 1.7%, was among the strongest boosts after a report

that its Google unit is developing a Gemini-integrated server

chip aimed at improving AI efficiency and easing

computing-capacity constraints.

Among other individual movers, Domino's Pizza was up

2.2% after the pizza chain's quarterly revenue edged past Wall

Street estimates.

Declining issues outnumbered advancers by a 1.21-to-1 ratio on

the NYSE, where there were 81 new highs and 96 new lows. On the

Nasdaq, 2,086 stocks rose and 2,541 fell as declining issues

outnumbered advancers by a 1.22-to-1 ratio. The S&P 500 posted 9

new 52-week highs and 6 new lows.