By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks moved in and out of negative territory as the Institute for Supply Management admitted an error in calculating its manufacturing index and released revised data.

The U.S. manufacturing sector expanded at a faster pace in May, the Institute for Supply Management said Monday after twice correcting an error in its seasonal-adjustment calculations that led to a downbeat reading in the index.

The benchmark S&P 500 and the Dow Jones Industrial Average hit record intraday levels in early trade and hovered near those levels.

Earlier, upbeat manufacturing data from China lifted sentiment globally, but enthusiasm on Wall Street was dampened by economic releases.

The S&P 500 (SPX) was up less than a points at 1,923.82. The Dow Jones Industrial Average (DJI) added 18 points, or 0.1%, to 16,736.25. The Nasdaq Composite (RIXF) was down 10 points, or 0.2%, at 4,232.42.

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"The correct headline suggests that the economy continues to heal from the first quarter slump. In particular, the new orders component is encouraging," said Quincy Krosby, market strategist at Prudential Financial.

"The economy is improving, but not as fast as investors hoped for," Chris Gaffney, senior market strategist at EverBank Wealth Management.

"We expect the market to keep grinding higher. However, with volatility at low levels, there is a fear among investors and everyone is waiting for that big 'black swan' event," he added.

American manufacturers grew in May at the fastest rate of 2014, as almost every major sector showed improvement, according to a index that was corrected Monday. The ISM revised its main gauge of manufacturing activity to 55.4 in May from April's 54.9, according to press reports.

The first incorrect report showed that U.S. factories slowed their pace of expansion to 53.2 in May, sending stocks lower and prompting some economists to question the numbers. Read: ISM and the parade of wrong numbers.

Separately, the final Markit reading of U.S. manufacturing conditions in May totaled 56.4, compared to a preliminary reading of 56.2, the privately run firm said Monday. In April the index registered 55.4.

Deal news sends Broadcom, Protective Life soaring

In corporate news, Broadcom Corp. (BRCM) shares surged 8.1% after the company said Monday it hired J.P. Morgan to explore options for its cellular baseband business, including a possible sale or wind-down of the business.

Shares of American Realty Capital Healthcare Trust Inc. (HCT) rallied 8.8% on news that Ventas Inc. (VTR) has agreed to buy the company in a $2.6 billion deal. Shares in Ventas fell 3.2%.

Shares of Protective Life Corp. (PL) soared 12% after Dai-ichi Life Insurance Co. said it is considering buying a life insurer, in response to a Wall Street Journal report that it is mulling a $4.87 deal to buy Protective Life.

Shares of Allergan Inc. (AGN) were up 1.6%, after Valeant Pharmaceuticals International Inc. (VRX) late Friday raised its bid again for the Botox maker to $55 billion from $49.4 billion.

Shares of Conn's Inc. (CONN) jumped 6.3% after the retailer beat analysts' first-quarter profit and sales estimates.

Asian, European stocks rise

Asia stocks rose on Monday, with the Nikkei 225 index surging 2.1%. China's latest official PMI index, which rose to a five-month high, helped boost Asian markets. This helped to boost the U.S. dollar back over 102 yen (USDJPY), which in turn benefitted Japanese stocks. Chinese markets on the mainland and in Hong Kong were closed for a holiday.

The strong Chinese data also helped European stocks, with gains for the Stoxx Europe 600 driven by natural-resource firms.

In other markets, gold futures for August (GCQ4) edged up, while crude oil for July delivery (CLN4) pushed lower.

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