U.S. stocks rose Monday, further extending gains across the Dow Jones Industrial Average and the S&P 500 as investors continued to assess the pace of the economic recovery.
The Dow industrials added 252 points, or 0.9%, to 27352 in early-morning trading, and the S&P 500 gained 0.3%. The Nasdaq Composite was mostly flat, as technology stocks booked some losses.
Last Friday’s surprisingly upbeat jobs report continued to stoke investor demand for riskier assets, analysts said. The report showed the U.S. economy added 2.5 million jobs in May, handily topping forecasts and giving investors some optimism that the U.S. may have passed the peak of the economic turbulence wrought by the coronavirus pandemic.
Shares of airlines, retailers, cruise liners and other companies tied to the reopening of the economy led the market higher. Energy stocks also got a boost after Organization of the Petroleum Exporting Countries struck a deal over the weekend to extend production through July.
“The nonfarm payrolls have suggested that the depth and the nature of the recession may be less severe than first thought,” said Edward Park, deputy chief investment officer at Brooks Macdonald.
But Mr. Park added investors shouldn’t get too excited over just one data point. The U.S. remains at risk of a second wave of coronavirus infections as states reopen, and some worry that protests following the killing of George Floyd last month may contribute to a fresh round of cases.
“Even though the market sentiment has improved, there’s a little bit of recognition that while the U.S. payroll figures were strong, assuming that we’re well on the road to a full recovery is a little premature,” Mr. Park said.
Some U.S. states are reporting an increase in the number of new infections after having lifted restrictions on social and business activity. California, Utah, Arizona, North Carolina, Florida, Arkansas and Texas, among others, have all logged rises in confirmed cases, according to a Johns Hopkins tabulation of a five-day moving average from over the weekend.
New York City, the U.S. area hit hardest by the pandemic, began reopening its economy Monday.
“The virus is not going to be gone in two months time,” said Oliver Jones, senior markets economist at Capital Economics. “The sectors that are vulnerable to lockdowns such as transport still show investors expect a slow or painful withdrawal from the measures in coming months.”
On Monday, shares of consumer discretionary and industrial companies rose more than 1%, notching solid gains alongside real estate and financial stocks.
Cruise operators Carnival and Norwegian both rose 11% in early-morning trading, as those stocks continued to dig their way out from the steep losses suffered earlier this year.
Airliners also rose. United Airlines Holdings added 8.5%, while American Airlines and Delta Air Lines rose 7.5% and 6.3%, respectively.
Energy stocks broadly rose, pushing the sector up 3.2%.
The yield on the benchmark 10-year U.S. Treasury note ticked up to 0.907%, from 0.903% Friday. U.S. yields surged at the end of last week to their highest level since late March after Friday’s better-than-expected jobs report, signaling a significant shift in sentiment among bondholders who had been concerned about the prospects for the economy.
Elsewhere, European stock indexes wavered between small gains and losses. The pan-continental Stoxx Europe 600 ticked 0.2% lower. A fiscal stimulus plan proposed by the European Union’s executive arm in recent weeks, which is likely to be discussed by top EU leaders on Thursday, faces resistance from some nations.
“There’s still some lingering concern over the European Recovery Fund,” said Dean Turner, economist at UBS Global Wealth Management. “As impressive and as needed as the recovery fund is, none of it comes alive until next year.”
Investors may get fresh cues on the European Central Bank’s response to the coronavirus pandemic and wider monetary policy when ECB President Christine Lagarde speaks to EU lawmakers on Monday.
In Asia, Japan’s Nikkei 225 added 1.4% by the close of trading, while the Shanghai Composite and South Korea’s Kospi Composite posted more tepid gains. Markets in Australia were closed for a holiday.
Airline stocks rose Monday as hopes for a sustained economic recovery build.
Photo: David Paul Morris/Bloomberg News—Michael Wursthorn contributed to this article.
Write to Anna Isaac at anna.isaac@wsj.com and Chong Koh Ping at chong.kohping@wsj.com
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