By Chris Prentice and Amanda Cooper WASHINGTON/LONDON (Reuters) – U.S. shares extended last week’s rally and European shares climbed on Monday as signs of a cooling U.S. economy stoked hopes that the Federal Reserve will slow its pace of rate hikes. The Dow Jones Industrial Average rose 1.34%, the S&P 500 gained 1.19% and the Nasdaq Composite added 0.86%. The tech-heavy Nasdaq recovered after taking a hit from tumbling Tesla Inc shares and as traders awaited earnings in the coming days from Apple, Google parent Alphabet and Amazon.com. U.S. business activity contracted for a fourth straight mo…