Updated from 4:28 p.m. EDT

Stocks closed a rocky session mixed Monday as blue-chip stocks managed eke out a marginal recovery following the previous session's giant selloff, even as tech shares finished to the downside.

The Dow Jones Industrial Average, up roughly 120 points earlier, wavered late in the session before closing up 70.51 points, or 0.58%, to 12,280.32. The S&P 500 clawed its way up from a late pullback to end up 1.08 points, or 0.08%, at 1361.76.

The Nasdaq Composite, which was weak for virtually the entire session, dropped 15.1 points, or 0.61%, to 2459.46 amid losses in big tech names Apple ( AAPL) -- which unveiled its new 3G-enabled iPhone today -- as well as Cisco ( CSCO) and Google ( GOOG).

"Considering what happened last week, I have to say that this is a pretty poor bounce-back," said Phillip Roth, chief technical market analyst with Miller Tabak. Referring to a longer-term rebound in equities over the past three months, he added, "The bear market rally looks over."

Roth believes equities will eventually slide past the low point reached in March as Bear Stearns, now a part of JPMorgan Chase ( JPM), nearly collapsed. He added, however, that stocks "might not crack those lows imminently."

Crude oil, which ramped higher by more than $10 a barrel in the last session and helped yank down the Dow by some 400 points, remained at extraordinarily high levels today. Still, futures saw a bit of profit-taking in the wake of news that Saudi Arabian oil minister Ali al-Naimi has called Friday's massive gains "unjustified," according to the Saudi Press Agency. Futures were off $4.19 to $134.35 a barrel.

Even so, energy names were doing well, with oil-and-gas giants Exxon Mobil ( XOM) and Chevron ( CVX) adding 2.6% and 1.7%, respectively. BP ( BP) bumped up 2.5%.

Further, the nationwide average for gas prices at the pump hit the $4 milestone on Sunday, according to AAA, and today it was at another all-time high of $4.023 a gallon.

Roth noted that gains in energy stocks were disproportionately supporting the S&P.

"Stocks are up and interest rates are up, and the leading stocks are energy and basic-materials stocks," Roth said. "That's the message that investors believe this is an economic boom, which is wacky. I call this a negative feedback loop. You can't go up with yields getting higher."

The 10-year note saw choppy trading today but ended with a price drop of 21/32, which pushed the yield up to 3.99%. The 30-year bond moved slipped 1/32 in price, yielding 4.63%.

"I'm still saying there's a good stockpile of cash to buy stocks if people aren't scared enough to do it," said Bill Stone, chief investment strategist with PNC Wealth Management, noting that the total amount of household cash rose to $8.56 trillion as of May 26. "But the fear trade's definitely back again as of Friday."

Despite the positive finish, stocks' breadth was poor. Decliners outran advancers by a 3-to-2 margin on the New York Stock Exchange, which saw some 2.19 billion shares change hands. On the Nasdaq, volume reached 1.87 billion shares as losers beat winners 7 to 3.

On the data side, the National Association of Realtors said pending-home sales swelled 6.3% in April, far better than the economists' consensus for a 1% drop and up from a March decline of 1%.

As for currency markets, the U.S. dollar reversed an early dip as crude oil held in negative territory, firming by 0.7% against the euro at $1.5650 and settling up 1% against the yen to fetch 106.07. The dollar index, which measures the greenback against a basket of its major counterparts, was better by 0.7%.

But the dollar remains very weak, having dropped by 18.5% against the euro since the start of 2008. Treasury Secretary Henry Paulson today told CNBC that he would never take intervention off the table in order to stabilize the weak dollar, in essence echoing the same concern for the greenback's plight voiced by Federal Reserve chairman Ben Bernanke last week. The central-bank chief acknowledged that the softening of the dollar can aggravate inflation.

Back in commodities, gold futures finished down 90 cents to $898.50 an ounce.

Among companies, Lehman Brothers ( LEH) announced plans to raise $6 billion through an offering for common and preferred stock and said it expects to post a fiscal second-quarter loss of $2.8 billion, or $5.14 a share. Word of a cash-raising and a big loss has been circulating since last week. Shares slid 8.7%.

"I think the market hates unknowns more than even large knowns," said Stone, "so perhaps getting Lehman out of the way and 'fessing up to their big loss is a positive overall, even though it's not necessarily a positive for the stock as of this moment."

For now, the financial group was performing poorly as it dealt with some other negative news, including a report from a Swiss newspaper that UBS ( UBS) could see another $3.9 billion in writedowns in the fiscal second quarter in addition to the $19 billion it has already reported. Shares of the Swiss banking giant surrendered 3.9%.

UBS was, moreover, hit with negative analyst research along with Citigroup ( C) and Merrill Lynch ( MER).

In another dire forecast on financials, Oppenheimer analyst Meredith Whitney said the trio could write down another $10 billion thanks to their exposure to MBIA ( MBI) and Ambac ( ABK), which lost their perfect financial-strength ratings last week.

Citi stock surrendered 2.3% as Merrill fell 3.2%. Shares of MBIA and Ambac sank around 10% apiece.

Moreover, a BlackRock analyst told reporters in Singapore that while the worst of the global credit crisis is behind, he expects it to stretch over another two to three years, according to media reports.

The NYSE Financial Sector Index plunged 1.8%.

On the brighter side, lender CIT ( CIT) finished 3.2% higher after scoring $3 billion in long-term securities-based financing from Goldman Sachs ( GS).

Staying in the financial space, Hilb Rogal & Hobbs ( HRH) rocketed some 42% after Britain-based Willis Group ( WSH), a fellow insurance broker, agreed to take it out for $46 a share, or $2.1 billion. That includes $400 million in debt assumption. Willis shares shed 6%.

McDonald's ( MCD) was among the best-performing Dow components after saying same-store sales, or those from locations open a year or longer, jumped 7.7% last month as foreign markets saw especially good numbers. U.S. comps were up 4.3% from a year earlier. Shares moved up 4.1%.

Meanwhile, Bloomberg reported that the Securities and Exchange Commission may recommend this week that the major credit-rating agencies -- Moody's, Standard & Poor's, and Fitch Ratings -- be forbidden from advising investment banks on how to achieve high-end rankings for their asset-backed securities, according to people familiar with the matter.

Returning to research calls, Lehman Brothers upgraded Northwest Airlines ( NWA) and United Airlines operator UAL Corp. ( UAUA) to overweight, and UAL was furthermore upped to hold from sell at Soleil. Still, Northwest shares lost 4.2% and Northwest was down 1.6%.

Motorola ( MOT) was downgraded at Oppenheimer, and UBS lowered bulldozer maker Caterpillar ( CAT) to sell. Cowen & Co. cut Acrobat software maker Adobe Systems ( ADBE) to neutral from outperform.

Markets abroad were mixed. In Asia, Tokyo's Nikkei 225 plunged 2.1% overnight, and Taiwan's main index dropped 1.8%. Hong Kong and China were closed. Among European bourses, London's FTSE 100 fell 0.5%, and Frankfurt's Xetra Dax rose 0.2%. The Paris Cac was better by 0.1%.