* U.S. service sector contracts at slower pace in June
* Oil falls over 4 pct to $64 a barrel, energy sector hit
* Dow up 0.2 pct, S&P off 0.4 pct, Nasdaq off 1 pct
* For up-to-the-minute market news click []
(Updates to mid-afternoon)
By Edward Krudy
NEW YORK, July 6 (Reuters) - The Nasdaq and the S&P 500
fell on Monday as concerns about the strength of an economic
recovery kept pressure on stocks and commodity prices.
But the Dow industrials edged higher as some investors
snapped up defensive stocks amid continued concern over the
economy following last week's non-farm payrolls report.
Investors were also looking ahead to the start of second
quarter earnings season on Wednesday for an indication of how
corporations are weathering the economic downturn.
American Express Co <AXP.N> was among the Dow's top
percentage gainers, climbing 5.2 percent to $23.43 after
Stifel Nicolaus raised its rating on the company's stock to
"hold," saying it was the least exposed to new rules on the
credit card sector. []
The weakness of June's employment report, which was
released last Thursday before the market shut for the long
holiday weekend, is still casting a pall over Wall Street,
said Robert Auer, senior portfolio manager of SBAuer Funds in
Indianapolis.
"The market is now wanting to see what the earnings season
has in store," Auer said. "And it's not just what the numbers
are. It's going to be what the companies say that's going to
be more important."
The Dow Jones industrial average <> gained 12.85
points, or 0.16 percent, to 8,293.59. The Standard & Poor's
500 Index <.SPX> dropped 3.12 points, or 0.35 percent, to
893.30. The Nasdaq Composite Index <> lost 18.59 points,
or 1.03 percent, to 1,777.91.
Among the heaviest weights on the Nasdaq was iPhone and
iPod maker Apple Inc. <AAPL.O>, down 1.8 percent at $137.53.
Earlier on Monday, the U.S. Department of Justice began a
review of whether telephone companies such as AT&T <T.N> and
Verizon Communications <VZ.N> have abused their market power
in recent years, according to The Wall Street Journal. The
Justice Department's review could explore if carriers'
exclusive deals on popular phones hurt smaller rivals, the
newspaper said.
While data released earlier on Monday by the Institute for
Supply Management showed the U.S. service sector contracted in
June at a slower pace than expected, the market's sentiment
was still colored by last week's much worse-than-expected jobs
report. For details, see []
On Thursday, the U.S. Labor Department reported a decline
of 467,000 in nonfarm payrolls, nearly 100,000 more than
expected. The U.S. stock market was shut on Friday for the
long Independence Day holiday weekend.
August crude futures <CLc1> touched a five-week low,
falling 4.21 percent to $63.91 per barrel on Monday and
sending shares of Marathon Oil Corp <MRO.N> down 2.2 percent
to $28.35. Holly Corp <HOC.N> shares slid 4 percent to
$17.87.
(Editing by Jan Paschal)
