UPDATE 1-FTSE 100 edges up powered by Rolls Royce

* Rolls Royce up 11.5 pct after results

* Paddy Power tumbles on disappointing guidance

* WPP hit by report P&G cutting ad agency spending(Updates with details, closing prices)

By Helen Reid and Danilo Masoni

LONDON, March 7 (Reuters) - British stocks rose for a thirdstraight session on Wednesday, although gains were tempered bythe resignation of U.S. economic advisor Gary Cohn, whichrekindled worries the U.S. administration was shifting towardsprotectionism.

The FTSE 100 ended up 0.16 percent at 7,157.84points, as a rally in engine maker Rolls Royce and gains amongindustrials more than offset weakness among commodity stocks.

"Whilst the rhetoric has clearly increased in recent days,particularly with the timing of Gary Cohn's departure, the keytests are whether Donald Trump proceeds to sign this order butalso what other nations do in response," said Edward Park,investment director at Brooks Macdonald in London.

Trade fears caused metals prices to slip, driving minersGlencore, Anglo American, BHP Billitonand Rio Tinto down 0.1 to 1.6 percent.

Oil prices also tumbled, sending oil majors BP andRoyal Dutch Shell down 0.3 percent and 0.7 percentrespectively.

Rolls Royce shares charged ahead, up 11.5 1 percentafter its turnaround plan boosted profit ahead of expectations.

The sharp rise in share price could be down to investorsunwinding short positions in the stock, traders said.

Astec Analytics data showed the cost to borrow Rolls Royceshares has risen over the past month, indicating increasedinterest in shorting the stock leading up to these results.

The FTSE banking index edged up 0.1 percent, asthe release of draft guidelines for a Brexit trade deal showedthe EU would only offer financial services firms in London alimited ability to sell many of their services to Europeancompanies.

Just Eat shares recovered slightly from the previousday's results-driven losses, up 3.2 percent.

Paddy Power Betfair shares fell 3.4 percent, thesecond worst-performance on the FTSE, after reporting full-yearresults whose lower guidance disappointed investors.

"Increased investment in brand and international expansionis likely to equate to a reduction in our 2018 EBITDA forecastof circa 20 million pounds, or 4 percent," wrote Davy Researchanalysts.

Advertising agency WPP was the biggest decliner,down 3.9 percent. U.S. consumer goods giant Procter & Gamble wasreported to be cutting ad agency spending by $1.25 billion overthe next three years, the latest blow to the agency model.

French ad agency Publicis fell 1.9 percent to thebottom of the CAC 40.

Hill & Smith shares jumped 4.9 percent after theinfrastructure products maker reported record revenue andprofits in its full-year results.

"The outlook is generally positive across the Group, withany progress on a Trump infrastructure plan likely to helpsentiment," N+1 Singer analysts wrote, adding there may also bepotential for M&A.

Overall, analysts have been revising earnings lower for theFTSE 100 in recent weeks as the index struggles at 14-monthlows.

(Reporting by Helen Reid and Danilo Masoni; editing by LarryKing)