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* Levi Strauss gains after co raises FY profit forecast

* Block falls after MS downgrades rating

* Weekly jobless claims increase more than expected

* Indexes up: Dow 0.71%, S&P 0.81%, Nasdaq 0.98%

April 4 (Reuters) - Wall Street's main stock indexes advanced on Thursday as recent economic reports boosted the prospect of monetary policy easing later this year, while investors awaited policymakers to offer clues on the timing of the cuts.

Initial claims for state unemployment benefits rose to 221,000 for the week ended March 30 versus an estimate of 214,000 forecast by economists polled by Reuters, indicating a slowing labor market, which supports the Federal Reserve's target of three rate cuts this year.

The S&P 500 and Nasdaq closed higher in the last session after data showed the U.S. services industry growth slowed further in March. Statements from Federal Reserve officials, including from Chair Jerome Powell, also supported the sentiment.

While policymakers generally agreed that rates could fall later this year, Powell said this would happen only when they "have greater confidence that inflation is moving sustainably down" to the Fed's 2% target.

"With every new release, investors are hoping that the data will support a slowing economy and resultant Fed rate cuts," said Peter Andersen, founder of Andersen Capital Management.

Equities fell earlier this week following some strong economic reports, including manufacturing activity and job openings data that raised doubts about the three rate cuts widely priced in for the year.

Money markets are currently seeing a near 60% chance of at least a 25 basis point rate cut in June, according to the CME Group's FedWatch tool.

Investors will be closely monitoring comments from Fed policymakers, including Richmond Fed President Thomas Barkin, a voting member, and his Cleveland counterpart Loretta Mester, for further clues on the monetary policy, before the key nonfarm payrolls data on Friday.

At 9:35 a.m. ET, the Dow Jones Industrial Average was up 278.08 points, or 0.71%, at 39,405.22, the S&P 500 was up 42.35 points, or 0.81%, at 5,253.84, and the Nasdaq Composite was up 159.32 points, or 0.98%, at 16,436.78.

Ten of the 11 major S&P 500 sectors were trading higher, with information technology leading gains, up 1.2%, while rate-sensitive real estate rose around 1%.

Most megacap growth stocks edged up in early trading, with Meta Platforms, Amazon.com and Nvidia up between 1.2% and 3.1%.

The Philadelphia Semiconductor Index jumped 1.5%, with Micron Technology amongst the top gainers, rising 1.5% to a fresh record high.

Levi Strauss jumped 16.8% after the apparel maker raised its annual profit forecast, citing savings from its recent cost-cutting measures and fewer discounts.

Online furniture retailer Wayfair advanced 4.4% after Evercore ISI upgraded its rating to "outperform" from "in-line".

Block fell 3.4% after Morgan Stanley downgraded the payments fintech company to "underweight" from "equal-weight".

Lamb Weston dropped 12.5% after the frozen goods maker trimmed its full-year revenue and adjusted profit guidance.

Advancing issues outnumbered decliners by a 6.00-to-1 ratio on the NYSE by a 3.68-to-1 ratio on the Nasdaq.

The S&P index recorded 42 new 52-week highs and 1 new lows, while the Nasdaq recorded 50 new highs and 17 new lows. (Reporting by Shristi Achar A and Shashwat Chauhan in Bengaluru; Editing by Anil D'Silva and Shinjini Ganguli)