Stocks jumped Monday, rallying to their highest levels in amonth, as newly confident investors fed off Friday's strong job numbers and even ignored a slight rise in oil prices.

After spending the whole session in positive territory, the Dow Jones industrial average (search) ended up 148.26 points, or 1.45 percent, at 10,391.08. The Standard & Poor's 500 Index (search) closed up 18.03 points, or 1.61 percent, at 1,140.53. The technology-focused Nasdaq Composite Index (search) climbed 42.00 points, or 2.12 percent, to 2,020.62.

The start of trading on the New York Stock Exchange (search), the Nasdaq Stock Market (search) and the American Stock Exchange (search) was delayed two minutes in a tribute to former President Reagan, who died Saturday. Most U.S. financials markets will be closed Friday for the national day of mourning.

Widespread media coverage of Reagan's time as president — marked by explosive growth in the economy and the stock market — rekindled a sense of optimism among investors.

"There could be a nostalgia rally, a bit of a Reagan bounce," said John Davidson, president of Partner Re Asset Management Corp. "There may be an element of looking back on the Reagan years that is giving people once again a sense of well-being."

Investors were also assured by last Friday's strong payrolls report, and a sense that the price of oil may be leveling off after hitting record highs.

After remaining low for most of the day, benchmark light sweet crude oil climbed 22 cents to $38.71 in late trading on the New York Mercantile Exchange. The slight rise was largely ignored by investors who have worried about inflation in recent weeks as oil prices climbed past $42 a barrel. If oil prices can at least remain under $40 per barrel, analysts believe the market's current upward trend may stabilize.

"We're getting toward a crucial time for the market where we either see a surge in volume and broad-based buying, or we see profit-taking and a further decline in the markets," said Michael Sheldon, chief market strategist at Spencer Clarke LLC. "If oil prices can keep steady and no new geopolitical problems come up, then we have a chance to break to the upside."

The major indexes notched their biggest daily percentage gains this month, sending the Nasdaq into the plus column for the year so far, while extending the S&P 500's advance for 2004.

Technology stocks got a lift as investors bet that those companies would be among the first to benefit in the economic recovery.

"In an economic recovery, you're going to be drawn to more cyclical sectors like industrials, materials and tech," said John Caldwell, chief investment strategist at McDonald Financial Group in Cleveland. "Tech is the biggest of all of those, so it garners the most attention."

Boeing Co. (BA) shares advanced $1.23, or 2.6 percent, to $48.13. On Sunday, a Boeing executive said the aerospace company could see orders for its new 7E7 aircraft, its first new plane in a decade, reach 200 this year and potential sales could total 3,500.

On the tech-heavy Nasdaq, Cisco Systems (CSCO) led gainers, rising $1.11, or 4.9 percent, to $23.89, helping drive the Standard & Poor's Communication Equipment Index up 4 percent, making it one of the the top-performing S&P sectors.

ImClone Systems Inc. (IMCL), the company at the center of the Martha Stewart insider trading scandal, rose almost 9.8 percent, or $7.12, to $79.60. ImClone's Erbitux drug controlled head and neck cancer better than radiation and helped some patients live longer, researchers said at the American Society of Clinical Oncology annual conference on Saturday.

Casino operator Mandalay Resort Group (MBG) jumped after rival MGM Mirage (MGG) launched an unsolicited bid Friday to acquire Mandalay for $4.85 billion. Mandalay surged $9.96 to $70.23, while MGM Mirage fell $1.19 to $44.84.

McDonald's Inc. (MCD) was down 25 cents at $26.61 after it announced a 7.9 percent rise in same-store sales in May due to growing market share among fast-food chains.

Wal-Mart Stores Inc. (WMT) said its same-store sales were tracking at the low end of its 4 percent to 6 percent forecasts. Wal-Mart gained 91 cents to $57.50.

General Motors Co. (GM) rose 89 cents to $47.11 after it said it would spend up to $3 billion in China over the next three years, doubling its manufacturing capacity in the world's fastest-growing automotive market.

Trading was light, with 1.2 billion shares changing hands on the New York Stock Exchange, below the 1.4 billion daily average for last year. About 1.5 billion shares were traded on Nasdaq, below the 1.7 billion daily average last year.

Advancers outnumbered decliners on the NYSE by 15 to 4, and by about 5 to 2 on the Nasdaq.

The Russell 2000 index of smaller companies was up 11.15, or 2 percent, at 578.90.

Overseas, Japan's Nikkei stock average rose 2.8 percent. In Europe, Britain's FTSE 100 closed up 0.8 percent, France's CAC-40 climbed 0.6 percent for the session and Germany's DAX index gained 1.4 percent.

Reuters and the Associated Press contributed to this report.