CATCo Share News (CAT)

* China, U.S. announce $50 bln tariffs on each other'simports

* Industrials lag with Boeing, Caterpillar the biggestweights

* All three major Wall Street indexes turn positive

* Indexes up: Dow 0.36 pct, S&P 0.55 pct, Nasdaq 0.69 pct(Updates with late afternoon prices, commentary, changesbyline, adds New York dateline)

By Sinéad Carew

NEW YORK, April 4 (Reuters) - U.S. stocks were higher inafternoon trading on Wednesday, with the major indexesrecovering from earlier losses as investors' fears eased over atrade conflict between the United States and China.

Beijing hit back against U.S. plans to impose tariffs on $50billion in Chinese goods, with proposals for a list of similarduties on key American imports including soybeans, planes, cars,beef and chemicals.

However, investor concerns appeared to ease after Trump'stop economic adviser Larry Kudlow said the administration wasinvolved in a "negotiation" with China rather than a trade war.

The market also seemed to take comfort from the fact thatthe effective date of China's move depends on when the U.S.action takes effect and Washington has a two-month window forpublic comment and consultation.

Omar Aquilar, Chief Investment Officer at Charles Schwab inSan Francisco, said equity investors may have reacted too soonas fixed income and currency markets appeared unperturbed by theexchange between China and the United States.

If currency and fixed income investors are not concerned,"that tells you a lot about what the implications might be,"said Aquilar, adding that even if the tariffs actually happen itwould be a few quarters before they would hurt revenue.

The S&P opened below its 200-day moving average, a keytechnical level, but inched above as the session progressed, andby afternoon was in positive territory, joined by the Nasdaq andthen the Dow.

At 2:43 p.m (1843 GMT), the Dow Jones Industrial Averagerose 86.19 points, or 0.36 percent, to 24,119.55, the S&P500 gained 14.44 points, or 0.55 percent, to 2,628.89 andthe Nasdaq Composite added 48.12 points, or 0.69percent, to 6,989.40.

Despite big swings in stocks, trading activity in U.S.equity options was muted as expectations for strong corporateearnings quelled the urge to load up on contracts that benefitfrom a surge in market volatility.

The Cboe Volatility Index, the most widely followedbarometer of expected near-term volatility for the S&P 500, wasdown 0.13 point at 20.97.

Boeing and Caterpillar were still the biggestdrags on the Dow due to their exposure to China, but well offtheir session lows by late afternoon. Boeing was last down 2percent while Caterpillar was down 0.7 percent.

The S&P 500's industrials sector also pared lossesbut was still down 0.2 percent in late afternoon trading.

The technology sector turned positive and was lastup 0.6 percent, helped by Apple which turned positiveand was last up 1.5 percent.

China's tariffs on U.S. soybean exports led to bets thathigher domestic reserves would lower food costs for meatproducers such as Tyson Foods, Hormel, SandersonFarms and Pilgrim's Pride, helping thosestocks.

Lennar jumped 9.3 percent to lead the percentagegainers on the S&P after the homebuilder reported quarterlyrevenue that beat estimates as it sold more homes at higherprices.

Advancing issues outnumbered declining ones on the NYSE by a1.33-to-1 ratio; on Nasdaq, a 1.98-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and eight new lows;the Nasdaq Composite recorded 30 new highs and 89 new lows.(Additional reporting by Saqib Iqbal Ahmed and Herbert Lash inNew York and Sruthi Shankar in Bengaluru; Editing by PatrickGraham and James Dalgleish)