NEW YORK — A burst of corporate dealmaking is giving investors a shot of confidence about the economy.

Stock indexes rose more than 1 percent in light trading yesterday to break a three-day slide. The Dow Jones industrial average rose 124 points for its biggest gain in more than a month, recouping much of what it lost last week.

Large acquisitions from Abbott Laboratories and Xerox Corp. pushed shares of drugmakers and technology companies higher, and the buying spread to other parts of the market as investors hoped that the $6 billion-plus deals could be a sign that takeover activity is finally picking up.

Resumption of corporate takeovers would represent an important milepost in the recovery of the financial system.