* Oil up slightly; hopes of US-Iran talks weighed against

Houthi threat

* Some US megacaps due to report this week

* S&P 500, Nasdaq move up

(Updates to early afternoon)

By Caroline Valetkevitch and Alun John

NEW YORK/LONDON, July 20 (Reuters) - A global stock index

edged higher on Monday as chipmaker shares recovered some of

their recent sharp losses, while oil prices were also slightly

higher with investors cautious about developments in the Gulf.

Yemen's Iran-aligned Houthis declared a naval blockade against

Saudi Arabia. But Iran's Foreign Ministry said mediators had

presented "proposals" to Tehran, signalling that diplomatic

contacts remain active, but gave no details.

U.S. crude rose 0.15% to $82.61 a barrel and Brent

rose to $88.63 per barrel, up 0.6% on the day. Higher

oil prices have remained a worry for consumers and businesses

since the February 28 start of the U.S.-Iran conflict.

Equities mostly stabilized after last week's chip stock-led

pullback.

"We're seeing a bit of a turnaround in some of these

semiconductor stocks that were under pressure," said Peter

Cardillo, chief market economist at Spartan Capital Securities

in New York. An index of semiconductors was last up 1.5%

after ending Friday down more than 20% from its late June

closing record high, a move that confirms it has been in a bear

market.

"Another factor is oil prices have somewhat reversed."

The Dow Jones Industrial Average fell 158.80 points, or

0.30%, to 51,987.62, the S&P 500 rose 18.40 points, or

0.25%, to 7,476.09 and the Nasdaq Composite rose 141.45

points, or 0.55%, to 25,661.70.

U.S. second-quarter earnings season picks up pace, with several

major companies, including Intel ( INTC ) and IBM ( IBM ) due to

report results.

The earnings will reinforce or challenge this year's gains,

which have been driven by a surge in AI capital spending lifting

semiconductor stocks and other companies that are seen as the

beneficiaries of the buildout.

The season will provide some insight into the AI-related trade,

including for chipmakers, and also provide more color on

secondary effects of the war.

U.S. Treasury yields rose as traders weighed escalating oil

prices, driven by the widening war with Iran, and the impact on

prices.

Futures markets are pricing in at least one Federal Reserve

rate hike by year-end, and on Monday the benchmark

10-year Treasury yield was at 4.56%, up 2 basis points.

The yield on benchmark U.S. 10-year notes rose 6.28

basis points to 4.604%, from 4.541% late on Friday.

The dollar rose as investors eyed developments in the Iran war

as well, while the pound fell from earlier highs as markets

prepared for new British Prime Minister Andy Burnham.

Sterling weakened 0.26% to $1.3418.

The dollar index, which measures the greenback against a

basket of currencies including the yen and the euro,

rose 0.15% to 100.98, with the euro down 0.25% at $1.141.

U.S. natural gas futures eased about 1% on rising output, a

decline in liquefied natural gas export flows, and forecasts for

lower demand this week than previously expected.