The market had little in the way of corporate or economic news to give it direction, and instead used an 8.3 percent slide in the benchmark Shanghai Composite Index as an impetus to sell. It was its biggest one-day drop since the Feb. 27 plunge that set off a brief global market selloff as the Chinese government attempts to cool the country's market boom.

However, the effect of the latest stock drop in China was minor compared to the selling wave triggered in February — and showed the U.S. market's resilience to volatility overseas. Major exchanges in Europe and Asia also was able to brush off the latest Chinese shock.

Investors used Monday to adjust positions after both the Standard & Poor's 500 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's really no major drivers in the market, so we're really just meandering along."

DOW DOWN IN MIDDAY TRADING

In midafternoon trading, the Dow fell 11.95, or 0.09 percent, to 13,656.16.

Broader stock indicators were narrowly mixed. The S&P 500 index rose 0.68, or 0.04 percent, to 1,537.02, and the Nasdaq composite index lost 1.97, or 0.08 percent, to 2,611.95.

Last week, the Dow posted a 1.19 percent gain; the S&P 500 index rose 1.36 percent; and the Nasdaq composite index added 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.

The dollar slipped against other major currencies, while gold prices rose.

Oil prices rose after a Nigerian militant group announced a one-month cease-fire, and a U.S. gasoline pipeline was restarted. A barrel of light sweet crude rose $1.12 to $66.20 a barrel on the New York Mercantile Exchange.

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

FLURRY OF DEALMAKING CONTINUES

In corporate news, the flurry of dealmaking 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 $1.28, or 7.9 percent, to $17.37.

Publisher Dow Jones & Co. fell 76 cents to $60.44 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 $2.16, or 4.4 percent, to $51.81; Atlas shares rose $7.13, or 22.9 percent, to $38.55.

Meanwhile, The Wall Street Journal reported that Avaya Inc. came a step closer to being acquired by private equity firms TPG Capital LLP and Silver Lake Partners. Avaya rose 58 cents, or 3.6 percent, to $16.66.

Solectron Corp. rose 48 cents to $3.85 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 $1.55 to $119.95.

Krispy Kreme Doughnuts Inc. fell 51 cents, or 5.9 percent, to $8.16 after it said its first-quarter loss widened on falling revenue.

And Wal-Mart Stores Inc. rose $1.34, or 2.7 percent, to $50.81 after being upgraded by analysts at Wachovia Corp. and JPMorgan Chase & Co.

Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where volume came to 827.4 million shares.

The Russell 2000 index of smaller companies was down 0.34, or 0.04 percent, at 853.07.

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 dropped 0.14 percent, and France's CAC-40 shed 0.69 percent.

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