Recasts with preliminary close of trading, adds analyst comment

By Stephen Culp and Medha Singh

NEW YORK, June 4 (Reuters) - Wall Street advanced on Thursday as progress toward ending the Iran war buoyed investor sentiment, while disappointing results from Broadcom led a chip selloff that held the Nasdaq's gains in check.

The blue-chip Dow surged, hitting a record closing high with a boost from healthcare .SPXHC and financial stocks .SPSY.

The S&P 500 posted more muted gains, while the Nasdaq ended essentially unchanged.

Chipmaker Broadcom AVGO.O missed revenue expectations, sending its shares tumbling and casting a pall over the AI frenzy, which has sent chip stocks .SOX soaring so far this year.

"About the only blemish on the market at this point is Broadcom, and I think investors are buying the dip," said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest in Elmhurst, Illinois. "I don't think investors have given up on chips yet, but what they've yet to come to grips with, 'Is this real? Are these valuations legitimate?' I'm not sure yet that investors have really questioned that."

The U.S. House of Representatives passed a measure on Wednesday that would block President Donald Trump from continuing the war on Iran.

Additionally, a U.S.-mediated ceasefire agreement between Israel and Lebanon, an essential condition of an Iranian agreement to a peace deal, bolstered optimism of a near-term resolution to the war. But the truce was rejected by the pro-Iran Hezbollah, which said it would not withdraw troops from Lebanon.

A drop in front-month crude futures reflected hopes that tanker traffic through the crucial Strait of Hormuz could shortly resume.

"How many deals have we had? It's always right around the corner, a corner we've yet to reach," Nolte added. "Things are moving, but are they moving at a pace that's going to allow the world to get back to what passes for normal in a few weeks, a few months, or maybe sometime next year?"

On the economic front, initial jobless claims unexpectedly rose 6.1%, and first-quarter labor costs and productivity were revised sharply lower. A report from Challenger, Gray and Christmas showed layoffs announced by U.S. corporations jumped 11% in May to 97,006. Nearly 40% of those layoffs were attributed to AI.

According to preliminary data, the S&P 500 .SPX gained 31.14 points, or 0.41%, to end at 7,584.82 points, while the Nasdaq Composite .IXIC lost 19.72 points, or 0.07%, to 26,834.26. The Dow Jones Industrial Average .DJI rose 875.09 points, or 1.73%, to 51,562.16.

Chipmaker Marvell Technology MRVL.O gained, while Advanced Micro Devices AMD.O, Micron Technology MU.O and Qualcomm QCOM.O lost ground on the day.

The healthcare sector got a boost from UnitedHealth UNH.N after Bank of America raised its rating on the healthcare conglomerate's shares to "buy."

The financial index's rebound followed a sharp selloff in the previous session due to revived concerns over private credit.

Blackstone shares BX.N advanced after it became the latest asset manager to cap withdrawals from its flagship private credit fund following a rise in redemption requests.

Cybersecurity firm CrowdStrike CRWD.O slumped after reporting an increase in quarterly operating expenses.

An investor roadshow for Elon Musk-led SpaceX SPCX.O began on Thursday ahead of its market debut on June 12. It aims to raise $75 billion in a record IPO that would value it at $1.75 trillion.