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Alpine Immune surges on Vertex Pharma's $4.9-bln takeover

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March producer prices at 2.1% YoY vs 2.2% estimated

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Indexes: Dow down 0.03%, S&P up 0.10%, Nasdaq up 0.38%

(Updated at 9:38 a.m. ET/ 1338 GMT)

By Shashwat Chauhan and Shristi Achar A

April 11 (Reuters) -

The benchmark S&P 500 and the Nasdaq gained on Thursday

after softer-than-anticipated producer prices data soothed

investor jitters about sticky inflation, keeping hopes of rate

cuts from the U.S. Federal Reserve this year alive.

A Labor Department report showed the Producer Price

Index(PPI) for final demand rose 0.2% in March, against

forecasts of a 0.3% increase, according to economists polled by

Reuters. Annually, it rose to 2.1%, versus an estimate of 2.2%.

"The producer prices came in a little bit better than

expected and it was really a surprise, given the rise that we've

seen in commodity prices and a lot of input prices," said Paul

Nolte, senior wealth advisor and market strategist for Murphy &

Sylvest.

"Some of this will flow through to PCE in a couple

weeks, so the PCE might be a little bit better than expected."

A separate report showed the number of Americans filing

new claims for unemployment benefits came in at 211,000 for the

week ended April 6, against an estimate of 215,000.

Wall Street sold off sharply in the last session after data

showed U.S. consumer prices increased more than expected in

March, leading the financial markets to surmise that the central

bank might delay cutting interest rates until September this

year.

Several brokerages have shifted their rate-cut outlooks,

with UBS Global Wealth Management now expecting the Fed to start

cutting interest rates in September, compared to June earlier,

while BNP Paribas anticipates the first cut in July.

Yields across government bonds eased after Wednesday's

spike, with the 10-year note last at 4.5314%.

Futures contracts

that settle to the central bank's policy rate still point

to the Fed's September meeting as the most likely starting point

to rate cuts.

However, traders now see nearly even chances that the

Federal Reserve will cut rates in its late-July meeting.

Investors will also watch for comments from Richmond Fed

President Thomas Barkin and Atlanta Fed President Raphael Bostic

for hints on the central bank's rate trajectory.

The first-quarter earnings season will pick up pace on

Friday, when a trio of big banks - JPMorgan Chase & Co ( JPM ),

Citigroup ( C/PN ) and Wells Fargo ( WFC ) - is slated to post

quarterly results.

At 9:38 a.m. ET, the Dow Jones Industrial Average

was down 10.58 points, or 0.03%, at 38,450.93, the S&P 500

was up 5.24 points, or 0.10%, at 5,165.88, and the Nasdaq

Composite was up 61.00 points, or 0.38%, at 16,231.36.

Of the 11 S&P 500 sectors, five ticked higher, with

information technology leading advances with a 0.5%

gain.

Among single stocks, biotech firm Alpine Immune Sciences ( ALPN )

is set to be acquired by Vertex Pharmaceuticals ( VRTX )

for about $4.9 billion in cash, both companies said.

Alpine surged 36.4%.

Advancing issues outnumbered decliners by a 1.86-to-1 ratio

on the NYSE and by a 1.70-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and two new

lows, while the Nasdaq recorded 19 new highs and 24 new lows.