** Shares of U.S. defense companies rise broadly in early trading, tracking European peers, as investors eye talks between United States and Russia on possible Ukraine peace deal

** Lockheed Martin LMT.N climbs 0.9%, RTX Corporation RTX.N rises 1.7%, Howmet Aerospace HWM.N gains 0.9%

** Northrop Grumman gains 1.3%, L3Harris Technologies LHX.N rises 0.8%, Axon Enterprise AXON.O up 3.5%

** S&P 500 Aerospace and Defense sector index .SPLRCAERO up 1.2%

** European arms manufacturers have rallied for two days as talks began, pushing STOXX 600 .STOXX to fresh record highs .EU

** Investors eyeing prospects for higher European defence spending as the region's governments face pressure from United States to increase military spending

** Russian Foreign Minister Sergei Lavrov says the country and United States agreed to start process to settle Ukraine conflict

** Aerospace and Defense index up 6.9% this year, after rising 12.4% in 2024

(Reporting by Lisa Mattackal)

((LisaPauline.Mattackal@thomsonreuters.com;))