LONDON - Global stocks struggled for momentum on Wednesday as improving economic data was offset by concern that surging coronavirus cases in the United States could derail the world's recovery before it properly begins.

Wall Street's major averages opened higher on Wednesday as investors digested the newly-released US payrolls data.

Shortly after the opening bell, the Dow Jones Industrial Average jumped 166.52 points, or 0.65 percent, to 25,979.40. The S&P 500 was up 14.59 points, or 0.47 percent, to 3,114.88. The Nasdaq Composite Index increased 19.59 points, or 0.19 percent, to 10,078.36.

US private sector employment increased by 2.369 million jobs in June, US payroll data company Automatic Data Processing (ADP) reported Wednesday.

Germany's manufacturing sector contracted at a slower pace in June while French factory activity rebounded into growth, data showed.

German retail sales rose sharply in May, reflecting a rebound in private consumption, while a recovery in China's factory activity offered further signs that the world's second largest economy may have passed the worst of the devastation caused by the pandemic.

Germany's jobless rate rose by 69,000 in June, far less than expected. Economic institute Ifo said Europe's largest economy will gradually recover after the slump caused by the pandemic and will likely return to last year's level at the end of 2021.

Coronavirus cases surged, with the United States recording 47,000 infections on Tuesday, according to a Reuters tally, its biggest single-day spike since the pandemic began.

MSCI's world shares index was 0.1 percent higher after rising 18 percent for its biggest three-month gain since 2009 in the second quarter, but it still closed the first half around 8 percent lower from where it started the year.

After their best quarter since March 2015, European stocks opened firmer, with the broader Euro STOXX 600 gaining 0.3 percent.

"We are at the beginning of the quarter but it doesn't look very different from where we left the last one," said François Savary, chief investment officer at Swiss wealth manager Prime Partners, predicting "a further consolidation over the summer."

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent, led by gains on the Chinese mainland.

E-Mini futures for the S&P 500 were down 0.2 percent.

It followed a strong finish to the quarter on Wall Street but also a loss of momentum in recent weeks as US infection rates have surged, with some states reimposing restrictions on business and personal activity.

The S&P 500 index rose 1.5 percent for an almost 20 percent gain over the past three months, fuelled by unprecedented central bank stimulus and hopes for a swift pandemic recovery, but it rose only 1.8 percent in June.

Coronavirus cases more than doubled in 14 US states last month, a Reuters analysis showed, and fears are growing that the caseload could prompt fresh lockdowns.

"The rise in COVID-19 infections is now triggering a reversal on the reopening strategy," said Rodrigo Catril, senior FX strategist at National Australia Bank in Sydney. "It remains to be seen if the US economy will continue to surprise over the coming month."

The US government bond market remains in a cautious mood.

Yields on benchmark 10-year government debt rose overnight to 0.6774 percent, but finished the quarter steady.

In Europe, Germany's 10-year yield rose to a one-week high, rising 2 basis points on the day to -0.44, helped by better than expected German retail sales.

Currency markets were in a holding pattern before the next slew of data due to provide a snapshot of the US recovery.

The dollar rose overnight but edged back down in early London trading, before US manufacturing PMI and unemployment data. The euro was broadly flat on the day, at US$1.12275.

US manufacturing activity data on Wednesday is forecast to show a recovery from an 11-year low in April while the non-farm payrolls report on Thursday is expected to show the economy added 3 million jobs in June.

Gold hovered near an 8-year high at US$1787.86 an ounce.

Brent crude rose 2.5 percent to US$42.32 a barrel while US crude was up 2.7 percent at US$40.31 a barrel after an industry report showed crude stockpiles in the US staged a bigger drop than expected.