The stock market remained resilient in the face of record intraday and closing prices for oil. A barrel of light crude reached an intraday high of $62.30 before closing at $61.57, up $1, on the New York Mercantile Exchange. The death of Saudi King Fahd was cited as creating uncertainty in the oil market.

The surge in oil prices was mitigated by upbeat July sales at Wal-Mart as well as a bullish reading of the Institute for Supply Management's manufacturing index — showing that both the consumer and industrial sectors have adapted well to high energy costs. However, the strong growth in the economy raised concerns about the Federal Reserve and its policy of gradually raising the nation's benchmark rate.

"What it's (economic data) also doing is telling investors that the Fed is not done as quickly as people were thinking two months ago," said Russ Koesterich, senior portfolio manager at Barclays Global Investments in San Francisco. "That's creating a little bit of headwind for stocks."

The Dow Jones industrial average fell 17.76, or 0.17 percent, to 10,623.15.

Meanwhile, the broader stock indicators moved higher. The Standard & Poor's 500 index was up 1.17, or 0.09 percent, at 1,235.35, and the Nasdaq composite index gained 10.55, or 0.48 percent, to 2,195.38.

A continued rise in bond yields drew investors away from stocks. The yield on the 10-year Treasury note rose to 4.32 percent, its highest showing since April, from 4.29 percent late Friday. The dollar edged lower against most major currencies, while gold prices rose.

Investors were encouraged by a surprising gain in the ISM's manufacturing index for July. The index rose to 56.6, better than the 54.5 economists forecast and higher than June's 53.8 reading.

Yet while the ISM figures showed a robust growth rate for the industrial sector, the breadth and depth of July's rally had many investors hedging their bets on whether it could continue through August. The Dow gained 3.56 percent for the month, while the S&P rose 3.6 percent and the Nasdaq surged 6.22 percent.

"Any time you have runs like these, people are always going to get jittery," said Bill Groenveld, head trader at vFinance Investments. "But to take healthy pauses here and there — there's nothing wrong with it."

Wal-Mart rose 18 cents to $49.53 as the retailer reported a 4.4 percent increase in sales from stores open at least a year, another strong sign of consumer spending.

The technology sector saw a boost from online auctioneer eBay Inc., which climbed $1.83 to $43.61 after it received an upgrade from "neutral" to "buy" at Citigroup Smith Barney. Analysts there said the company's earnings were solid and that future trends looked positive.

Oil stocks climbed higher as oil hit a new record. Exxon Mobil Corp. rose 48 cents to $59.23, while Chevron Corp. was up 42 cents at $58.43.

Procter & Gamble Co. saw a 9 percent rise in profits due to strong beauty, home care and health segments, and beat Wall Street's profit forecasts by a penny per share. P&G nonetheless fell 31 cents to $54.32 as the company issued a lower outlook for the third quarter.

As its highly successful employee discount program expires, General Motors Corp. will cut prices on 30 of its new 2006 models in an attempt to keep its sales from flagging, according to media reports. GM added 4 cents to $36.86, while Ford Motor Co. climbed 11 cents to $10.85 as it extended its own employee discount program through Sept. 6 and also cut prices.

Home Depot Inc. weighed on the Dow, falling 65 cents to $42.86 after it received a subpoena from federal prosecutors in Los Angeles for documents related to the company's handling of hazardous waste

Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where preliminary consolidated volume came to 1.73 billion shares, compared with 1.8 billion on Friday.

The Russell 2000 index of smaller companies was up 3.91, or 0.6 percent, at 683.66.

Overseas, Japan's Nikkei stock average rose 0.4 percent. In Europe, Britain's FTSE 100 was up 0.16 percent, France's CAC-40 gained 0.12 percent for the session, and Germany's DAX index climbed 0.09 percent.