Stocks fluctuated today as investors digested a manufacturing report that was weak but not as bad as many on Wall Street had feared, and also absorbed another disappointing construction sector report.

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 American 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.

“We had a lower opening and then the market turned mixed. The two economic numbers that came out today were still rather on the negative side and they point to further weakness in economic activity,” the chief market economist at New York-based brokerage house Avalon Partners Inc., Peter Cardillo, said. “I think that fact that the market might not be drastically declining at this point is because of the fact of the numbers from the ISM, even though they showed contraction, were slightly better than the market expected.”

In midday trading, the Dow Jones industrial average edged up 3.75, or 0.03%, to 12,270.14.

Broader stock indicators were mixed. The Standard & Poor’s 500 index rose 1.62, or 0.12%, to 1,332.25, and the Nasdaq composite index fell 3.41, or 0.15%, to 2,268.07.

Today’s decline comes after a sizable pullback Friday amid an unwelcome mix of economic and corporate reports. The news dashed hopes from early last week that the economy would soon show signs of a nascent recovery. The major indexes lost more than 2.5% Friday, with the Dow industrials falling 315 points.

Bond prices pulled back today after jumping amid Friday’s stock market losses. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.57% from 3.53 percent late 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. Oil recently changed hands up $1.45 at $103.29. The dollar hit a fresh low against the euro, while gold prices rose.

Beyond the increase in oil prices, investors also had to contend with a Commerce Department report showing that construction spending fell by 1.7% in January. Economists had forecast a decline of 0.8%.

Billionaire Warren Buffett said in a CNBC interview today that the American economy is essentially in a recession. Most economists define a recession as two straight quarters of negative growth in the nation’s gross domestic product.

In corporate news, Boeing Co. fell after losing a $40 billion Air Force tanker contract. Boeing, one of the 30 stocks that comprise the Dow industrials, 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, were named Friday as winners of one of the biggest Pentagon contracts in decades. Boeing fell $3.34, or 4%, to $79.45, while Northrop jumped $3.31, or 4.2%, to $81.92.

United Technologies Corp. said yesterday it has offered to acquire Diebold Inc. 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. United Technologies fell $1.52, or 2.2%, to $68.99, while Diebold jumped $14.92, or 62%, to $39.04.

Online broker E-Trade Financial Corp. named Chairman Donald Layton, a veteran of JPMorgan Chase & Co., as its chief executive. Mr. Layton became chairman of the New York-based broker in November after it reported huge losses related to investments in risky mortgages. E-Trade rose 13 cents, or 3%, to $4.40.

Oil stocks rose amid the new records. Exxon Mobil Corp. rose 99 cents to $88, while Chevron Corp. gained 54 cents to $87.20. Both stocks are components of the Dow industrials.

Shares of financials continued to fall amid concerns about their profitability. Citigroup Inc. fell 53 cents, or 2.2%, to $23.18. Bear Stearns Cos. fell $2.28, or 2.9%, to $77.58.

Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 662.2 million shares.

The Russell 2000 index of smaller companies slipped 0.52, or 0.08%, to 685.66.

Stock markets overseas fell sharply after Wall Street’s retrenchment Friday. Japan’s Nikkei stock average closed down 4.49%. Britain’s FTSE 100 closed down 1.12%, Germany’s DAX index fell 0.86%, and France’s CAC-40 declined 1%.