* Deaths from COVID-19 reached half a million on Sunday
* Sterling drops on infrastructure funding concerns
* Boeing (NYSE:BA) boosts industrial stocks in the U.S. (Updates prices, changes comment, byline, dateline; previous LONDON)
By Rodrigo Campos
NEW YORK, June 29 (Reuters) - World share markets rose on Monday, led by a rebound on Wall Street, even as rising COVID-19 cases threaten to stall the recovery of the world's largest economy.
Contracts to buy U.S. previously owned homes rose by the highest percentage on record in May. But they remained below their February level and were down compared with May 2019, which also kept alive expectations for even more economic stimulus. COVID-19 cases worldwide rose past 10 million and deaths surpassed 500,000 on Sunday. The relentless spread of the new coronavirus in the United States, Latin America and elsewhere curbed optimism over the global economy and raised worries that some reopening plans will be delayed.
A rally in Boeing shares BA.N after U.S. authorities confirmed that 737 MAX certification flights could start Monday gave life to the Dow industrials .DJI , while factory- and materials-heavy sectors of the S&P 500 also rose .SPX .
The Dow Jones Industrial Average .DJI rose 404.28 points, or 1.62%, to 25,419.83, the S&P 500 .SPX gained 32.09 points, or 1.07%, to 3,041.14 and the Nasdaq Composite .IXIC added 88.84 points, or 0.91%, to 9,846.06.
"Markets are attempting to figure out exactly what the new norm will be given the threat of further outbreaks when attempting to lift lockdown measures," said Joshua Mahony, senior market analyst at IG.
The pan-European STOXX 600 index .STOXX rose 0.62% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.50%.
Emerging market stocks lost 0.57%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.93% lower, while Japan's Nikkei .N225 lost 2.30%.
It is an important week for U.S. data, with the ISM manufacturing index on Wednesday and monthly payrolls on Thursday, moved up a day due to observance of the Independence Day holiday on Friday. Federal Reserve Chair Jerome Powell is also testifying on Tuesday.
Bill Merz, head of fixed income research at U.S. Bank Wealth Management in Minneapolis, said he expected small changes for long-term yields, noting that Treasuries may be "one of the least-interesting markets for the rest of the year" due to the Fed's influence on the short end of the curve.
Benchmark 10-year notes US10YT=RR last fell 1/32 in price to yield 0.6397%, from 0.638% late on Friday.
The 2-year note US2YT=RR last rose 1/32 in price to yield 0.1583%, from 0.168%.
In currency markets, Sterling fell against both the dollar and euro as investors focused on how Britain's government will pay for its planned infrastructure push, while Brexit-related risks kept pressure on the pound. GBP= was last trading at $1.2276, down 0.46% on the day.
The dollar index =USD rose 0.058%, with the euro EUR= up 0.15% to $1.1234.
The Japanese yen weakened 0.49% versus the greenback at 107.69 per dollar.
U.S. crude CLc1 recently rose 2% to $39.26 per barrel and Brent LCOc1 was at $41.56, up 1.32% on the day.
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