NEW YORK -- US stocks rebounded Monday after news that Dubai's flagship conglomerate Dubai World will restructure 26 billion dollars in debt of some of its companies, easing default fears.

After spending most of the session in the red, the Dow Jones Industrial Average gained 34.92 points (0.34 percent) to finish at 10,344.84.

The tech-heavy Nasdaq composite rose 6.16 points (0.29 percent) to 2,144.60 and the broad-market Standard & Poor's 500 advanced 4.14 points (0.38 percent) to 1,095.63.

"Stocks finished higher, reversing their earlier decline, after Dubai World said it is in 'constructive' talks with banks on restructuring a portion of its debt," Charles Schwab & Co. analysts said in a note to investors.

Dubai World announced it would restructure part of the group, including property arm Nakheel, with total value of the debt carried by the companies subject to the restructuring process at approximately $26 billion.

The Dubai government's debt freeze announcement Wednesday had rocked markets as investors feared a possible default by Dubai and its state-owned businesses, which together owe an estimated $80 billion.

Traders returning for the first full session after the Thanksgiving holiday Thursday took some comfort from a weekend pledge by the United Arab Emirates central bank to provide additional liquidity to local and foreign banks operating in the UAE.

The Dubai developments boosted banks after their hammering Friday. The S&P banking sector index leapt 3.65 percent.

Citigroup added 1.23 percent at $4.11 and JPMorgan shot up 2.81 percent to $42.49. According to research firm CreditSights, they are the US banks most exposed to the UAE.

Goldman Sachs climbed 3.57 percent to $169.66, Morgan Stanley was up 3.51 percent at $31.58 and Bank of America gained 2.46 percent at $15.85.

Traders also digested an unexpected rise in business activity in the US Midwest region. The Chicago PMI rose to 56.1 in November from 54.2. Most analysts had expected a slight decline to 53.3.

Retailers were in focus in the kickoff of year-end holiday shopping.

The National Retail Federation reported that shoppers spent $41.2 billion over the Thanksgiving holiday weekend, up from $41.0 billion a year ago. More consumers shopped, but spending on average fell amid worries about recovery from recession.

Online retailers were hoping "Cyber Monday" discounts would boost sales.

Retailers' slide "stems from reports that indicate soft sales figures this past Friday, which is often considered to be one of the busiest shopping days of the calendar year," Briefing.com analysts said in a client note.

Department store giant Macy's skidded 3.89 percent to $16.31, discount titan Wal-Mart dipped 0.64 percent to $54.28 and electronics chain Best Buy slipped 0.08 percent to $42.79.

But Internet retailer Amazon.com zoomed up 3.17 percent to an all-time closing high of $135.91 after announcing record sales of its e-book Kindle reader in November.

AIG plunged 14.71 percent to $28.40. The ailing insurer, partly nationalized in a rescue a year ago, suffered from negative comments by the Sanford Bernstein brokerage, according to analysts at 24/7WallSt.com.

Bonds firmed. The yield on the 10-year US Treasury bond fell to 3.201 percent from 3.211 percent Friday and that on the 30-year bond fell to 4.194 percent from 4.209 percent. Bond yields and prices move in opposite directions.