NEW YORK ( TheStreet) -- Stocks finished mixed, but well off their lows Monday after Sen. Christopher Dodd (D., Conn.), chairman of the Senate Banking Committee, announced new financial regulatory proposals to rein in Wall Street, and morning factory data revealed some encouraging signs in the sector.

The Dow Jones Industrial Average added 17 points, or 0.2%, to 10,642. The S&P 500 edged up nearly a point, or 0.1%, to 1151, though the Nasdaq slipped 5 points, or 0.2%, to 2362.

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Investors appeared to be showing caution ahead of Tuesday's meeting of the Federal Open Market Committee as they question whether there will be any changes made to monetary policy.

Market observers got a glimpse of Senator Dodd's newest financial regulatory reform measures in the afternoon. The senator's speech laid out a series of proposals, including the creation of an independent consumer watchdog agency within the Federal Reserve and a systemic risk council, all while vowing that Congress would adopt financial reform sometime this year.

Stocks began selling off in the morning despite some improving factory figures. Industrial production rose 0.1% in February, surpassing economists' projections that levels would remain unchanged following January's 0.9% gain. Capacity utilization ticked up by 0.2 of a percentage point to 72.7%, compared with 72.5% in January. Economists had been expecting capacity utilization of 72.3% in February.

"Both industrial production and capacity utilization did come in slightly better than expected, which I think was quite constructive considering the severe weather in the Northeast in addition to recall activity from Toyota," said David Allon, senior financial professional and co-chair of the investment committee at Firstrust Financial Resources. "In light of those two factors, I think that industrial production was actually surprisingly strong, and for capacity utilization to be up with those two storms, it really speaks to the strength of the economy."

Manufacturing activity in New York slowed in March, according to the Empire State Manufacturing Survey , which came in at 22.86, from 24.91 in February. The level, however, was better than a reading of 21.45 that economists had been expecting for March.

Allon attributed market weakness to comments from China Premier Wen Jiabao over the weekend indicating that the yuan will remain stable despite urging from the U.S. to loosen its exchange-rate controls.

Furthering the sense of mounting tension with China were reports that Google ( GOOG) is expected to shut its Chinese-language search engine within weeks. Google's stock shed $19.35, or 3.3%, to $560.19.

Wal-Mart ( WMT) was the Dow's best performer, with shares up 2.8% to $55.43 on an upgrade to buy from hold. Citigroup analyst Deborah Weinswig cited the company's competitive food business.

Energy was one of the day's worst-performing sectors as oil prices slipped below the $80-a-barrel level. Exxon Mobil ( XOM) and Chevron ( CVX) were among the Dow's biggest laggards. Caterpillar ( CAT), Alcoa ( AA) and Travelers ( TRV) also dragged down the Dow.

Shares of Boston Scientific ( BSX) slumped 12.6% to $6.80 on news that its ICD cardiac devices line is indefinitely on hold as the result of a regulatory filing documentation error. Shares were among the most heavily traded on the New York Stock Exchange, following Citigroup ( C).

The NYSE had a listed volume of 4.1 billion, and the Dow saw volume of 160.6 million, compared with an average of 200.4 million.

Consol Energy ( CNX) is buying Dominion Resources' ( D) Appalachian exploration and production business for $3.5 billion in cash. Consol's stock slid 10.1%, while Dominion's gained 2 cents, or 0.1%, to $39.71.

Shares of Phillips-Van Heusen ( PVH) jumped 9.8%, to $52.40 on news that it agreed to acquire Tommy Hilfiger for roughly 2.2 billion euros ($3 billion).

Pinnacle Entertainment ( PNK) tapped Multimedia Games ( MGAM) Executive Anthony M. Sanfilippo to become its new president and chief executive. Shares whipsawed back and forth, closing at $8.64.

Capital One ( COF) said its credit card charge-off rate fell for the first time in at least five months in February. The stock inched higher by 9 cents, or 0.2%, at $39.98.

First Solar ( FSLR) sold a 30-megawatt photovoltaic solar power project to Southern ( SO) and Turner Renewable Energy.

PepsiCo's ( PEP) board approved an annual dividend increase of 7% and the repurchase of up to $15 billion of common stock through June 2013.

In commodities markets, crude oil for April delivery traded $1.44 lower to settle at $79.80 a barrel, while the April gold contract added $3.70 to settle at $1,105.40 an ounce.

The dollar was trading higher against a basket of currencies, with the dollar index up by 0.5%.

The benchmark 10-year Treasury weakened 1/32, lifting the yield to 3.704%.

Overseas, Hong Kong's Hang Seng fell 0.6% and Japan's Nikkei gained 0.01%. The FTSE in London slipped 0.6% and the DAX in Frankfurt fell 0.7%.

-- Written by Melinda Peer and Sung Moss in New York.