NEW YORK: US stocks kicked off a new quarter with solid gains on Monday, boosted by signs of strength in the US manufacturing and construction sectors.
But analysts expected the market to become more volatile as the week progresses with the crucial jobs report set for release on Friday, a day after the July 4 holiday, when US markets will be closed.
All but one of the top 10 S&P 500 sectors rose in Monday's broad advance, extending the S&P 500's 12.6 percent gain in the first six months of 2013. It was the strongest first half of a year since 1998.
Data from the Institute for Supply Management showed US manufacturing activity grew in June, rebounding from an unexpected contraction in May. Construction spending neared a four-year high in May, according to the Commerce Department.
"People saw ISM was stronger and slightly higher than consensus and decided to run with it," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
Reallocation of cash from bonds into stocks as the new quarter begins could be behind the strength the market showed even before the data, Forrest said.
Investors pulled $23.3 billion out of bond funds during the week to last Wednesday, the biggest outflow since records started in 1992, according to data from EPFR Global and Bank of America Merrill Lynch. The Dow Jones industrial average was up 114.36 points, or 0.77 percent, at 15,023.96. The Standard & Poor's 500 Index was up 13.44 points, or 0.84 percent, at 1,619.72. The Nasdaq Composite Index was up 39.34 points, or 1.16 percent, at 3,442.59.
Strength in overseas stock markets added to the positive tone. An index of Chinese shares rose 0.8 percent after Beijing policymakers assured investors that there was ample liquidity in the system.
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