The Dow Jones industrial average recovered from an 81-point deficit to gain 20.02 points, closing at 6,955.48. Decliners led advancers by nearly a 2-to-1 margin on the New York Stock Exchange, with 862 up, 1,653 down and 826 unchanged. NYSE volume totaled 494.43 million shares vs. 486.96 million on Friday.
The Standard & Poor's 500-stock list rose 2.54 to 795.71, and the NYSE's composite index rose 0.57 to 418.37.
The Nasdaq composite index fell 13.54 to 1,279.43, having recovered from a 26-point plunge. The American Stock Exchange index, which also has a large constituency of technology issues and smaller companies, fell 4.23 to 596.24.
Meanwhile, the yield on the 30-year Treasury bond -- a key determinant of corporate and consumer borrowing costs -- rose from late Friday's 6.94 percent to as high as 6.98 percent before settling at about 6.95 percent. The long-bond yield hasn't been above 7 percent since September.
The Dow's early decline was highlighted by an inauspicious start for the blue-chip barometer's four new components: Hewlett-Packard, Johnson & Johnson, Travelers Group, and Wal-Mart Stores. Those four companies replaced Bethlehem Steel, Texaco, Westinghouse Electric and Woolworth in the Dow index.
Also dragging down the Dow was Philip Morris Cos., which fell sharply for the second time in a week on worries about health-care liability suits against the tobacco industry. In the morning, the Supreme Court rejected an industry challenge to a Florida law that makes it easier for the state to sue tobacco companies for Medicaid money spent to treat smoking-related illnesses.
With no major economic readings to reinforce the enthusiasm over Friday's tame inflation report, many investors remained concerned that the economy's strength will force the Fed to slow things down by raising interest rates. Higher inflation or interest rates can hurt bonds by making their fixed-income return less attractive.