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Stocks rise on Wall Street after late loss Friday

Steve Rothwell, AP Markets Writer

In this Friday, May 31, 2013, photo, traders use their handheld devices as they work on the floor of the New York Stock Exchange. Uncertainty about the U.S. Federal Reserve's next course of action and a sharp, sudden plunge on Wall Street sent global stock markets lower Monday June 3, 2013. (AP Photo/Richard Drew)

NEW YORK (AP) -- The stock market is starting out June a lot better than it ended May.

Indexes stabilized in early trading Monday after finishing last month with a swoon late Friday afternoon.

Energy and technology companies led the early gains. Ford and General Motors rose after reporting higher vehicle sales last month.

The Dow was up 22 points at 15,139 points as of 10:42 a.m. Eastern Daylight Time Monday, or 0.6 percent. It plunged 208 points Friday, its worst drop in six weeks.

The Standard & Poor's 500 index gained five points to 1,634, or 0.3 percent.

Even though stocks closed May higher, signs that this year's rally have started to falter are starting to emerge. The Standard & Poor's 500 index closed higher for a seventh straight month, but the index also logged its first back-to-back weekly declines since November.

The yield on the 10-year Treasury note fell to 2.11 percent after an industry group reported that U.S. manufacturing contracted in May. It was trading at 2.17 percent minutes before the survey was released at 10 a.m.

That's a sign investors shifted money into U.S. government bonds in anticipation of slightly weaker U.S. economic growth. Investors tend to buy bonds when they want relatively safe assets that are less likely to lose value if the economy slows.

The Institute for Supply Management May index reported that U.S. manufacturing contracted last month for the first time since November. Its index of manufacturing was the lowest since June 2009.

The yield, which is used to setting interest rates on many kinds of loans including home mortgages, is about half a percentage point higher than it was at the start of the last month and is at its highest in more than two years.

The rate on the note has been climbing on speculation that the Federal Reserve is set to ease its $85 billion a month of bond purchases. Those purchases are intended to keep interest rates low and encourage borrowing and spending.

Higher interest rates are hurting demand for rich dividend-paying stocks like power and phone companies and the makers of consumer staples. Those three sectors, which had been investor favorites in the first quarter, continued to fall in early trading Monday.

In other trading, the Nasdaq composite was little changed at 3,455.

In commodities trading, oil climbed $1.31, or 1.42 percent, to $93.37 a barrel. Gold rose $9.40, or 0.8 percent, to $1,402 an ounce. The dollar rose against the euro and fell against the Japanese yen.

Among stocks making moves:

Cracker Barrel Old Country Store rose $6.22, or 7.3 percent, or $95.94 after the restaurant operator said its fiscal third-quarter profit rose 30 percent as higher prices on its menus helped increase its sales.

Ford rose 21 cents, or 1.3 percent, to $15.89 after the automaker said its sales rose 14 percent in May as demand for the F-Series pickup hit a six-year high. GM rose 50 cents, or 1.5 percent, to $34.38 after reporting its strongest month of sales since September 2008.