* Asset managers gain after labor department's 401(K)

guidelines

* Fed's Powell flags anchored inflation expectations

* Investors weigh Trump comments

(Updates to close)

By Caroline Valetkevitch and Purvi Agarwal

March 30 (Reuters) - U.S. stocks ended mostly lower on

Monday as U.S. President Donald Trump's new warning to Tehran

and a widening of the Middle East war offset optimism over his

comments on U.S. discussions with Iran.

Trump said the U.S. was in serious discussions with a "more

reasonable regime" to end the war, but repeated his threat to

open the Strait of Hormuz or risk U.S. attacks on Iranian oil

wells and power plants. Iran described U.S. peace proposals as

unrealistic.

Investors have been focused on how oil prices will impact

the global economy after they shot up since the start of the

war.

"The administration continues to send mixed messages," said

Rick Meckler, partner at Cherry Lane Investments, a family

investment office in New Vernon, New Jersey.

"When the messages seem good, to the extent they are

believed, it helps the market. If something they say implies a

more aggressive approach, the market sells off."

At the same time the conflict has been escalating. Yemen's

Iran-backed Houthi militia entered the war over the weekend.

All three of the major indexes started the day higher after

logging sharp declines in the previous session. Since the war

started, the Dow, the Nasdaq and the small-cap Russell 2000

have all confirmed correction territory, ending 10% lower

from their record-high closes.

According to preliminary data, the S&P 500

lost 25.52 points, or 0.40%, to end at 6,343.33 points,

while the Nasdaq Composite lost 153.16 points, or 0.73%,

to 20,795.20. The Dow Jones Industrial Average rose 53.27

points, or 0.12%, to 45,219.91.

Comments from Federal Reserve Chair Jerome Powell gave some

support to stocks. Powell said longer-term inflation

expectations appear to be holding despite the current energy

shock, and the Fed does not yet need to make a decision on how

to react to the latest troubles. Both U.S. crude oil and Brent

settled higher.

Money market participants have priced out any easing from

the Federal Reserve this year, compared with two cuts expected

before the war began, per the CME Group's FedWatch Tool.

The S&P 500 energy index was down slightly and

technology stocks were among the biggest drag on the

S&P 500.

On the flip side, the financial index gained after the

U.S. Department of Labor issued long-awaited guidelines intended

to clarify how trustees can add alternative assets to 401(k)

retirement plans.

Shares of asset managers climbed with Blackstone and

KKR both higher.