NEW YORK  Stocks were mostly lower Monday as investors digested news of weak reports on manufacturing and construction spending as well as another surge in oil prices.

Investors trying to determine whether recent pessimism about the economy has been well-founded or overwrought examined the Institute for Supply Management's index of U.S. manufacturing activity. The reading came in at 48.3 — stronger than the 48.1 the market expected, according to Thomson Financial/IFR.

However, the Commerce Department reported that construction spending in January fell by the steepest amount in 14 years.

"The two economic numbers that came out today were still rather on the negative side and they point to further weakness in economic activity," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners.

The Dow Jones industrial average fell 7.49, or 0.06%, to 12,258.90. In the broader market, the Standard & Poor's 500 index rose 0.71, or 0.05%, to 1,331.34, and the Nasdaq composite index fell 12.88, or 0.57%, to 2,258.60.

Monday's decline comes after a sizable pullback Friday amid an unwelcome mix of economic and corporate reports. Friday's news dashed hopes from early last week that the economy would soon show signs of a nascent recovery. The Dow industrials lost 315 points on Friday.

Rising oil prices remained on some investors' minds after light, sweet crude futures rose as high as $103.95 a barrel on the New York Mercantile Exchange, reaching an inflation-adjusted record high. The

The dollar hit a fresh low against the euro, while gold prices neared $1,000 an ounce. Silver set another 27-year high and platinum set a record as did soybean and corn futures.

Besides the increase in commodity prices, investors also had to contend with a Commerce Department report showing that construction spending fell 1.7% in January, more than twice economists' forecast of a 0.8% decline.

Billionaire Warren Buffett said in a CNBC interview Monday the U.S. economy is essentially in a recession. Most economists define a recession as two consecutive quarters of negative growth in gross domestic product.

In corporate news, Boeing (BA) lost a $40 billion Air Force tanker contract, weighing on the stock, which is one of the 30 that comprise the Dow industrials. Boeing had been supplying refueling tankers to the Air Force for nearly 50 years. European Aeronautic Defence and Space Co., which makes Airbus planes, and Los Angeles-based Northrop Grumman (NOC) were named Friday as winners of one of the biggest Pentagon contracts in decades.

United Technologies (UTX) said Sunday it has offered to acquire Diebold (DBD) for $2.63 billion. United Technologies, the parent of jet engine-maker Pratt & Whitney, Otis elevators and Sikorsky Aircraft, said it made the unsolicited offer Friday after trying to negotiate a deal with Diebold for two years. The move would broaden the company's security business and expand its presence in China.

Online broker E-Trade Financial (ETFC) tapped Chairman Donald Layton, a veteran of JPMorgan Chase, to serve as chief executive. Layton became chairman of the New York-based broker in November after it reported huge losses related to investments in risky mortgages.

Oil stocks rose amid the records.

Shares of financials continued to fall amid concerns about their profitability.

Stock markets overseas fell sharply after Wall Street's retrenchment Friday. Japan's Nikkei stock average closed down 4.5%. Britain's FTSE 100 closed down 1.1%, Germany's DAX index fell 0.9%, and France's CAC-40 declined 1%.

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