US STOCKS-S&P 500, Dow scale fresh three-month peaks

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* MoneyGram surges on report of takeover offer from Western
Union
* Airlines, cruise line operators climb as economies reopen
* Indexes: Dow rises 0.46%, S&P up 0.18%, Nasdaq down 0.17%

(Adds comment, details; updates prices)
By Devik Jain and Medha Singh
June 2 (Reuters) - The S&P 500 and the Dow Jones indexes hit
new three-month highs on Tuesday on prevailing optimism around
the reopening of businesses, with investors remaining cautious
around more disruptions from protests in the country over the
death of a black man while in police custody.
Some of the worst-hit stocks in the travel sector, including
American Airlines Group Inc AAL.O , United Airlines UAL.O ,
Norwegian Cruise Line NCLH.N and Carnival Corp CCL.N , rose
between 1.5% and 2.7%.
Improving economic data, trillions of dollars in stimulus
and the restarting of businesses have helped the S&P 500 .SPX
climb about 38% from its March lows, leaving it only about 11%
below its Feb. 19 record high.
But investors are keeping a close eye on Sino-U.S. tensions
and anti-police brutality marches and rallies that have often
turned violent in many cities.
Demonstrators set fire to a strip mall in Los Angeles,
looted stores in New York City and at least five U.S. police
officers were hit by gunfire, hours after President Donald Trump
vowed to deploy the U.S. military to regain control of the
streets. "The reopening of the country and getting back to business
is a much larger input into the equation versus what it is seen
primarily as a temporary shutdown of sporadic businesses in the
major cities that the demonstrations are actually causing the
most damage," said Art Hogan, chief market strategist at
National Securities in New York.
At 9:55 a.m. ET, the Dow Jones Industrial Average .DJI was
up 117.26 points, or 0.46%, at 25,592.28, the S&P 500 .SPX was
up 5.38 points, or 0.18%, at 3,061.11. The Nasdaq Composite
.IXIC was down 16.48 points, or 0.17%, at 9,535.57.
Cyclical sectors, including financials .SPSY and energy
.SPNY , were favoured among the 11 major S&P sectors in "a sign
that (the rally at) these levels and beyond can be sustained,"
said Thomas Hayes, managing member at Great Hill Capital Llc in
New York.
Technology-focused companies, including Amazon.com AMZN.O ,
Facebook Inc FB.O and Apple Inc AAPL.O which have led the
market recovery, were marginally lower on Tuesday.
Shares of Western Union WU.N jumped 11.9% after a report
the money transfer company has made an offer to buy its smaller
rival MoneyGram International Inc MGI.O . MoneyGram shares soared 31.3%.
Advancing issues outnumbered decliners by a 2.63-to-1 ratio
on the NYSE and by a 1.72-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs, while the
Nasdaq recorded 40 new highs. Neither indexes recorded new lows.