Dow, S&P eke out new records

NEW YORK (CNNMoney.com) -- The Dow industrials, S&P 500 and Russell 2000 all closed at record highs Monday, after a modestly upbeat session limited by surging oil prices and a steep decline in Chinese stocks.

The Dow (up 8.21 to 13,676.32, Charts) edged higher to close at an all-time high, it's third in the past four sessions.

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The broader S&P 500 index (up 2.84 to 1,539.18, Charts) rose 0.2 percent and closed at an all-time high, marking the index's fourth record close in a row.

The Nasdaq composite (up 4.37 to 2,618.29, Charts) also added 0.2 percent, and ended at a new six-year high.

The Russell 2000 small-cap index ended at an all-time high as well.

Stocks struggled earlier Monday as investors weighed sliding international markets, a weaker-than-expected rise in April factory orders and higher oil prices.

But the market managed to recover in the afternoon and ultimately post slim gains.

"At some point there will be a negative catalyst that sets the market lower, said Joseph Saluzzi, co-head of equity trading at Themis Trading. "It might be the 10-year note yield moving past 5 percent, a big run-up in oil prices or economic news that gives a sense of higher inflation."

But for now, the momentum is continuing to push stocks along, he said. That was evident in the way that stock investors were able to shrug off worries sparked by a big selloff in Chinese markets.

The benchmark Shanghai stock market slumped 8.3 percent overnight, adding to declines over the last week as the Chinese government has tried to slow the booming market. That sent European shares a bit lower Monday and initially dragged on U.S. stocks.

But any weakness was minimal compared to Feb. 27, when a 9 percent decrease in Chinese stocks sent stocks around the globe tumbling. On that day, the Dow lost 416 points and saw its biggest one-day point loss in 5-1/2 years.

"Score one for the bulls today," said Fred Dickson, chief market analyst at D.A. Davidson & Co. referring to the market's muted reaction to the selloff in Shanghai.

In addition to the China news, stock investors were keeping an eye on rising oil prices, which jumped amid concerns about a cyclone approaching the Arabian peninsula.

U.S. light crude oil for July delivery rose $1.13 to settle at $66.21 a barrel on the New York Mercantile Exchange.

On the upside, the jump in oil prices gave a boost to Sunoco (up $3.06 to $84.17, Charts, Fortune 500), BP (up $0.75 to $68.36, Charts) and other oil services companies.

Monday also brought its share of merger news. Solectron (up $0.51 to $3.88, Charts, Fortune 500) rallied 15 percent after it agreed to a $3.85 billion takeover bid by rival contract electronics manufacturer Flextronics (down $0.16 to $11.54, Charts).

Shares of Accredited Home Lenders Holding (Charts) jumped almost 10 percent after the a struggling subprime lender agreed to be bought out by private equity firm Lone Star for $400 million.

Treo maker Palm (up $1.48 to $17.57, Charts) said it is selling a 25 percent stake in its company to private equity firm Elevation Partners for $325 million, sending shares up 9.2 percent.

Dominion Resources (up $0.23 to $87.87, Charts, Fortune 500) agreed to sell its gas assets for $6.05 billion to a pair of companies.

And Cadence Design Systems (up $1.32 to $24.22, Charts) rallied on published reports that the chip-software developer is in buyout talks with a few private equity firms.

But Dow Jones & Co. (down $1.04 to $60.16, Charts) shares slipped while the publisher met with News Corp.'s (down $0.12 to $24.10, Charts, Fortune 500) Rupert Murdoch. News Corp. has offered $5 billion for the owner of The Wall Street Journal.

Apple (up $2.93 to $121.33, Charts, Fortune 500) shares jumped after it confirmed that its highly-anticipated iPhone will launch June 29th.

Wal-Mart Stores (up $1.74 to $51.21, Charts, Fortune 500) rose after J.P. Morgan, Morgan Stanley and others raised their ratings on the world's largest retailer.

On Friday, Wal-Mart's chief financial officer said the company will slow the pace of growth of its supercenter stores next year and that it will buy back $15 billion worth of its stock.

Market breadth was mixed. On the New York Stock Exchange, winners beat losers 9 to 7 on volume of 1.35 billion shares. On the Nasdaq, advancers topped decliners by a narrow margin on volume of 1.91 billion shares.

COMEX gold for August delivery fell 60 cents to settle at $676.30 an ounce.

Treasury prices rose, lowering the yield on the 10-year note to 4.92 percent from 4.95 percent late Friday. Bond prices and yields move in opposite directions.

In currency trading, the dollar fell versus the euro and the yen.