Stocks end session mixed

Stocks closed mixed Monday as investors wrestled with record-high commodity prices and data that pointed to further weakening of the economy.

Investors have been trying to determine whether recent pessimism about the economy has been well-founded or overwrought. The Institute for Supply Management’s index of U.S. manufacturing activity came in Monday at 48.3, its lowest level in nearly five years. The Commerce Department reported that construction spending in January fell 1.7%, the steepest drop in 14 years. And billionaire investor Warren E. Buffett told CNBC that the U.S. economy was essentially in a recession.

But rising commodity prices -- although they threaten to eat into consumers’ discretionary spending -- encouraged investors to pour money into energy, metal and mining companies.

“If you’re trying to be optimistic on the market going forward, one potential positive is you’re in a situation where energy outperformance can make up for some of the underperformance in financials,” said Michael Gallipo, investment manager at Citizens Funds in Portsmouth, N.H.

Oil futures for April delivery surged to a record $103.95 a barrel before settling up 61 cents at $102.45, while gold soared $9.40 to a record $981.50 an ounce, nearing the $1,000 mark. Silver, platinum, corn, soybeans and gasoline also hit all-time highs.

The Dow Jones industrial average -- after briefly slumping more than 100 points in afternoon trading -- finished down 7.49 points, or 0.1%, at 12,258.90.

Broader stock indicators were mixed. The Standard & Poor’s 500 index rose 0.71 of a point, or 0.1%, to 1,331.34, while the Nasdaq composite index fell 12.88 points, or 0.6%, to 2,258.60, its lowest close since October 2006.

The Russell 2,000 index of smaller companies sank 1.96 points, or 0.3%, to 684.22.

Declining issues outnumbered advancers by 8 to 7 on the New York Stock Exchange.

Yields on government bonds rebounded Monday after sliding last week. The yield on the benchmark 10-year Treasury note rose to 3.56% from 3.51% late Friday.

The dollar hit a fresh low against the euro. An index of the U.S. currency’s value against a basket of major currencies fell to a record low.

Mining and energy stocks rallied sharply Monday.

A gauge of raw-material producers in the S&P; 500 gained 1.6%. Coeur d’Alene Mines jumped 34 cents, or 7.1%, to $5.16. Harmony Gold Mining jumped $1.08, or 8.9%, to $13.22. Massey Energy advanced $3.34, or 8.7%, to $41.60. Newmont Mining rose $1.21, or 2.4%, to $52.38.

Freeport-McMoRan, the world’s second-largest copper producer, climbed $2.59, or 2.6%, to $103.45 after copper futures notched a record-high close on higher global inventories and increased imports by China. Copper is up 42% in the last year.

An index of 36 energy stocks in the S&P; 500 climbed 0.8% and provided the biggest boost to the broad index.

Exxon Mobil, the biggest U.S. oil company, rose 74 cents to $87.75. ConocoPhillips, the third-largest, climbed 73 cents to $83.44.

The two weakest stocks Monday in the Dow were Boeing and Citigroup.

Boeing fell $2.12, or 2.7%, to $80.67 after losing a $40-billion Air Force tanker contract, one of the biggest Pentagon contracts in decades, to a partnership of the European parent of Airbus and Northrop Grumman. Northrop Grumman jumped $3.96, or 5%, to $82.57.

Citigroup fell 62 cents, or 2.6%, to $23.09 on growing fear that problems with credit will worsen before they improve.

Thornburg Mortgage plunged $4.58, or 51%, to $4.32 after the jumbo-loan specialist said it could go out of business because more creditors were demanding repayment or additional collateral.

“That’s just a reminder that investors are not entirely sure what they’re up against with these finance companies,” said Stifel Nicolaus market strategist Joe Battipaglia.

Bond insurer Security Capital Assurance plunged 80 cents, or 53%, to 72 cents after saying it expected to log $1.5 billion in credit costs for the fourth quarter. Bigger rivals MBIA and Ambac Financial also fell. MBIA slid 35 cents, or 2.7%, to $12.62. Ambac lost $1.20, or 11%, to $9.94.

Among the day’s market highlights:

* Diebold soared $14.72, or 61%, to $38.84 after United Technologies disclosed it offered $2.63 billion, or $40 a share, for the ballot and cash machine company. United Technologies fell $1.11, or 1.6%, to $69.40.

* Apple slid $3.29, or 2.6%, to $121.73. Bank of America lowered its price target on the computer and gadget maker, expecting fewer sales of iPod music players and iPhones.

* Stock markets overseas fell sharply after a steep decline on Wall Street on Friday. Key indexes fell 4.5% in Japan, 1.1% in Britain, 0.9% in Germany and 1% in France.