Optimistic investors bid stocks sharply higher in light trading Monday, buoyed by the strength of the economy and even ignoring a slight rise in oil prices.

Much of Wall Street's optimism carried over from Friday, when a strong employment report boosted investor confidence. But some analysts, noting that the light volume from last week also continued into Monday, wondered how sustainable the rally was.

"The market seems to be going up because there aren't any sellers around, not because there's a lot of demand. That has a chance to end badly," said Richard Dickson, senior market strategist at Lowry's Research Reports.

Investors were also cheered by a $4.85 billion proposed merger in the casino industry. With mergers and acquisitions gaining popularity, investors saw the trend as a sign of a stable, healthy economy.

The Dow gained 148.26, or 1.4 percent, to 10,391.08. The Standard & Poor's 500-stock index rose 17.92, or 1.6 percent, to 1140.42. The Nasdaq composite index gained 42.00, or 2.1 percent, to 2020.62.

The start of trading on the New York Stock Exchange, the Nasdaq Stock Market and the American Stock Exchange was delayed two minutes in a tribute to former president Ronald Reagan, who died Saturday.

MGM Mirage has made an unsolicited $4.85 billion offer to acquire Mandalay Resort Group. MGM would also assume $2.8 billion in debt in what would be the biggest casino industry acquisition in history. Mandalay surged $9.96, to $70.23, while MGM Mirage fell $1.19, to $44.84.

McDonald's declined 25 cents, to $26.61, after it announced a 7.9 percent rise in same-store sales in May. Wal-Mart Stores said its same-store sales were tracking at the low end of its forecasts of 4 to 6 percent; Wal-Mart gained 91 cents, to $57.50.

General Motors rose 89 cents, to $47.11, after it said it would spend up to $3 billion in China over the next three years.

ImClone Systems surged $8.89, to $81.38, after researchers said its Erbitux medicine helped patients with head and neck cancers live twice as long as those getting standard treatment.

Other Indicators

* The New York Stock Exchange composite index rose 107.01, to 6610.89; the American Stock Exchange index rose 9.32, to 1210.51; and the Russell 2000 index of smaller-company stocks rose 11.15, to 578.90.

* Advancing issues outnumbered declining ones by 4 to 1 on the NYSE, where trading volume rose to 1.2 billion shares, from 1.11 billion on Friday. On the Nasdaq Stock Market, advancers outnumbered decliners by 5 to 2 and volume totaled 1.46 billion, up from 1.4 billion.

* The price of the Treasury's 10-year note rose 94 cents per $1,000 invested, and its yield fell to 4.76 percent, from 4.78 percent on Friday.

* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 109.61 yen, down from 111.00 late Friday, and a euro bought $1.2315, up from $1.2296.

* Light, sweet crude oil for July delivery settled at $38.66, up 17 cents, on the New York Mercantile Exchange.

* Gold for current delivery rose to $393.70 a troy ounce, from $390.90 on Friday, on the New York Mercantile Exchange's Commodity Exchange.

Bloomberg News contributed to this report.