New York ? Wall Street enjoyed a modest rebound Monday after three weeks of losses, advancing as investors felt more optimistic about the economy and indulged in a little bargain hunting. Falling oil prices and a strengthening dollar also spurred buying.

While Dow Jones industrial General Motors Corp. suffered from a new round of bad news, an $11 billion leveraged buyout of SunGard Data Systems Inc. showed that the recent wave of merger and acquisition activity would continue, and American International Group Inc. rebounded even as probes into its business practices continued.

The economy, however, was foremost on investors’ minds. There was no significant economic data released Monday, so the market was anxiously awaiting gross domestic product and employment numbers later in the week and hoping they would show the economy has enough strength to overcome inflation.

“Investors are cautiously putting a foot back into the market,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “The market appears to be oversold, but investors are going to need some sort of catalyst, whether it’s falling oil prices or earnings or some of the economic data coming out this week, to really have the confidence to push things higher.”

The Dow Jones industrial average rose 42.78, or 0.41 percent, to 10,485.65. The Dow has fallen more than 1 percent in each of the last three weeks.

Broader stock indicators also gained ground. The Standard & Poor’s 500 index was up 2.86, or 0.24 percent, at 1,174.28, and the Nasdaq composite index climbed 1.46, or 0.07 percent, to 1,992.52.

Investors were also cheered as the dollar gained ground against most major currencies, including the euro and the Japanese yen. Crude oil futures continued their slow retreat, with a barrel of light crude settling at $54.05, down 79 cents, on the New York Mercantile Exchange.

Bonds continued their slide, with the yield on the 10-year Treasury note rising to 4.64 percent, up from 4.59 percent late Thursday. Gold prices fell as the dollar gained strength.

Analysts noted that Monday’s move up came on very light volume, and the advance-decline lines showed decliners slightly ahead. And while the energy sector continued to lead the market for 2005, it was the worst performer of the month so far, despite record crude oil prices.

William Crowley, chief financial officer of Sears Holdings Corp., center, signs the podium to celebrate the first day of trading of Sears Holdings Corp. on the Nasdaq. From left are Mary Jo Duffy, vice president, divisional coach, Kmart Corp.; Crowley; Bob Greifeld, Nasdaq CEO; and Steve Sunderland, regional vice president of Sears Holdings Corp. The company's stock closed at 31.11 Monday.