updated 6/5/2007 7:15:59 AM ET 2007-06-05T11:15:59

Wall Street recovered from a mostly down session Monday, eking out a gain as investors brushed off another slide in Chinese stocks. The Dow Jones industrial average closed at another record high.

Major Market Indices

The market had little in the way of corporate or economic news to give it direction, but while it was in negative territory for much of the day, in the end it shook off an 8.3 percent slide in the benchmark Shanghai Composite Index . The Chinese index had its biggest one-day drop since the Feb. 27 plunge that set off a brief global market sell-off as the Chinese government attempts to cool the country’s market boom.

Investors used Monday to adjust positions after both the Standard & Poor’s 500-stock index and Dow Jones industrial average surged to record closes in the previous session. The market was encouraged by economic data released last week that suggested the economy was slowing, but not too quickly, and inflation remained in check.

However, on Monday the Commerce Department reported that orders to U.S. factories were weaker-than-expected in April . Investors might find some information to trade from with the release of the Institute of Supply Management’s manufacturing index on Tuesday, but not much else is on tap.

“I think you’re seeing a combination of investors wanting to take some profit on a Monday morning, and some fear because of what happened in China,” said Ryan Detrick, a senior technical strategist for Schaffer’s Investment Research. “There are really no major drivers in the market, so we’re really just meandering along.”

The Dow Jones industrial average closed the seesaw session with a gain of 8.21 points, or 0.06 percent, having struggled earlier in the session after the sharp drop in Chinese stocks. The broader Standard & Poor’s 500-stock index finished the day up 2.84 points, or 0.18 percent, while the Nasdaq composite index added 4.37 points, or 0.17 percent.

Last week, the Dow gained 1.19 percent, the S&P 500 index rose 1.36 percent and the Nasdaq composite index rose 2.22 percent.

On Monday, bonds edged higher, with the yield on the benchmark 10-year Treasury note falling to 4.93 percent from 4.96 percent late Friday. The Commerce Department report had some impact on the bond market on hopes weaker data will mean an interest rate cut this year. The report showed 0.3 percent in manufacturing growth in April, and economists expected a rise of 0.7 percent after a 3.1 percent jump in March.

Oil prices rose after a Nigerian militant group announced a one-month cease-fire, and a U.S. gasoline pipeline was restarted. The price of a barrel of light sweet crude oil rose on the New York Mercantile Exchange.

The dollar was mixed against other major currencies, while gold slipped.

Michael Sheldon, chief market strategist at Spencer Clarke, said the near term will be dominated by higher energy prices and bond yields — two catalysts that could cause the equities market to pull back. He believes there’s complacency among investors, and that the market will need a correction before resuming an advance later in the summer.

“As investors look ahead, we’re past the earnings season, the Fed seems to be out of the way for the moment, and we’ve had a run-up in equities prices over the past few months,” he said. “Given continued uncertainty in the housing sector, and rising energy and food prices, it appears likely to us that we should have a period of consolidation or profit taking before the market turns higher again.”

In corporate news, the flurry of deal-making activity continued this week. Smartphone maker Palm Inc. said Monday it got $325 million from private equity firm Elevation Partners and announced a shakeup on its board. Palm spiked $1.48, or 9 percent, to $17.57.

Publisher Dow Jones & Co. fell $1.04 to $60.16 as the owner of The Wall Street Journal meets with Rupert Murdoch about the possibility of an acquisition. Murdoch’s News Corp. has offered $5 billion for the company.

Oil and natural gas producer Anadarko Petroleum Corp. said late Sunday it is selling natural gas gathering systems and associated processing plants to Atlas Pipeline Partners LP for $1.85 billion. Anadarko rose $2.30, or 5 percent, to $51.95; Atlas shares rose $8.14, or 26 percent, to $39.56.

Solectron Corp. rose 51 cents, or 15 percent, to $3.88 after rival Flextronics International Ltd. said it would by the contract electronics maker for about $3.6 billion in cash and stock. Flextronics fell 16 cents at $11.54.

Apple Inc.’s highly anticipated iPhone will be available June 29 , according to both TV commercials broadcast Sunday night and a company spokesman. Shares of the technology company rose $2.93 to $121.33.

And Wal-Mart Stores Inc. rose $1.74, or 4 percent, to $51.21 after being upgraded by analysts at Wachovia Corp. and JPMorgan Chase & Co.

Overseas, Japan’s Nikkei stock average closed up 0.08 percent. At the close, Britain’s FTSE 100 was down 0.19 percent, Germany’s DAX index lost 0.14 percent and France’s CAC-40 shed 0.69 percent.

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