  Near-infrared spectra (0.95 -- 2.4 micron) of the peculiar Type IIn supernova
1998S in NGC 3877 from 95 to 355 days after maximum light are presented. K-band
data taken at days 95 and 225 show the presence of the first overtone of CO
emission near 2.3 micron, which is gone by day 355. An apparent extended blue
wing on the CO profile in the day 95 spectrum could indicate a large CO
expansion velocity (~2000 -- 3000 km/s). This is the third detection of
infrared CO emission in nearly as many Type II supernovae studied, implying
that molecule formation may be fairly common in Type II events, and that the
early formation of molecules in SN 1987A may be typical rather than
exceptional. Multi-peak hydrogen and helium lines suggest that SN 1998S is
interacting with a circumstellar disk, and the fading of the red side of this
profile with time is suggestive of dust formation in the ejecta, perhaps
induced by CO cooling. Continuum emission that rises towards longer wavelengths
(J -> K) is seen after day 225 with an estimated near-infrared luminosity >~
10^40 erg/s. This may be related to the near-infrared excesses seen in a number
of other supernovae. If this continuum is due to free-free emission, it
requires an exceptionally shallow density profile. On the other hand, the shape
of the continuum is well fit by a 1200 +- 150 K blackbody spectrum possibly due
to thermal emission from dust. Interestingly, we observe a similar 1200 K
blackbody-like, near-infrared continuum in SN 1997ab, another Type IIn
supernova at an even later post-maximum epoch (day 1064+). A number of dust
emission scenarios are discussed, and we conclude that the NIR dust continuum
is likely powered by the interaction of SN 1998S with the circumstellar medium.
