* March job gains surpass expectations, unemployment rate

dips

* ISM non-manufacturing PMI decelerates, prices paid hit

3-1/2-year high

* Soleno Therapeutics ( SLNO ) surges on Neurocrine's $2.9 bln

buyout deal

(Updates to market close)

By Stephen Culp and Purvi Agarwal

April 6 (Reuters) - U.S. stocks advanced on Monday as

investors looked for signs of progress toward a U.S.-Iran

ceasefire deal and evaluated President Donald Trump's

progressively heated threats of escalation should Iran fail to

reopen the Strait of Hormuz.

Iran has rejected the U.S. proposal for an immediate

ceasefire, insisting instead on a permanent end to the war,

according to the Islamic Republic News Agency (IRNA). The

rejection followed Trump's increasingly bellicose ultimatums,

vowing to rain "hell" on Iran if the crucial Strait of Hormuz

bottleneck remains closed to oil tanker traffic.

Investors drew some reassurance from a report that indicated

the U.S., Iran and a group of regional mediators continued to

discuss terms of a potential ceasefire.

All three major U.S. indexes advanced slightly, with the S&P

500 and the Nasdaq on track for the fourth consecutive day of

gains.

"The reality is we're inching, hopefully, closer to some

type of resolution," said Ryan Detrick, chief market strategist

at Carson Group in Omaha. "Unfortunately, it's not going to be

today. But I think investors are feeling like we're seeing more

talking on each side."

"The day-to-day volatility and headlines can be rather

nauseating," Detrick added. "But there's a sense of optimism in

the air with this upcoming earnings season, which starts very

soon, that corporate America once again will show solid, solid

performance and likely justifying what we still think is a bull

market."

The U.S. war on Iran has roiled markets for a little over a

month. Spiking crude prices stoked inflation fears, and stocks

have tumbled. Even though the S&P was on track for its fourth

consecutive session of gains, the bellwether index remains down

about 4% since the conflict began.

Economic data on Monday showed the U.S. services sector

expanded at a slower-than-expected pace in March, even as

employment contracted in the sector and prices paid, an

inflation predictor, surged to its highest level since October

2022.

The much-anticipated March jobs report, released on the Good

Friday market holiday, showed the U.S. economy added 178,000

jobs last month, nearly triple the 60,000 consensus, an upside

surprise dampened by a revision of February's job losses, to

133,000 from 92,000.

According to preliminary data, the S&P 500

gained 29.02 points, or 0.44%, to end at 6,611.71 points,

while the Nasdaq Composite gained 114.29 points, or

0.52%, to 21,993.47. The Dow Jones Industrial Average

rose 170.36 points, or 0.37%, to 46,675.03.

Trading volumes on Monday were thin, as many markets in

Europe and Asia are closed for public holidays.

Shares of Soleno Therapeutics ( SLNO ) jumped after

Neurocrine Biosciences ( NBIX ) agreed to acquire the

rare-disease drugmaker for $2.9 billion in cash.

Rising bitcoin prices boosted cryptocurrency firms

Coinbase and Strategy.