NEW YORK – The stock market began August with a huge rally after reports from around the world revived investors’ faith in the global recovery.

The Dow Jones industrial average rose 208 points Monday to its highest close in three months. All the major stock indexes rose about 2 percent.

The first day of the month brought a stream of news that reassured investors who have worried about a slowing of economic growth in the United States, China and Europe. Manufacturing was a common thread.

Monday’s news was encouraging after months of reports that showed the recovery was weakening. Those reports pulled the major stock indexes off their 2010 highs in late April and contributed to sharp swings in stock prices since then.

Some analysts were cautious even as stock prices jumped. Alan Gayle, senior investment strategist for RidgeWorth Investments in Richmond, Va., said Monday’s news showed only small changes in the economy.

“I do believe the pace of the expansion is slowing and I think that’s going to weigh on the markets as we go through the second half of the year,” he said.

Volume was light Monday as many investors, following the strategy they used during July, decided to stay out of the market until they feel more confident that its gains will hold. Many traders are also on vacation, and the drop in activity can exaggerate price moves.

The Dow rose 208.44, or 2 percent, to 10,674.38. It was the index’s highest close since May 13, when it finished at 10,782.95.

This was the Dow’s best first trading day for the month of August since 1934. August in general is seen as a volatile month for stocks, largely because of the light volume.