Stocks ticked higher Monday after sliding at the open. General Motors was the top gainer on the Dow.
Today's lone indicator was leading indicators, which rose 0.1 percent for a second straight monthin April following five months of decline, according to the Conference Board.
"These data certainly reflect a weak economy, but not one in recession," Ken Goldstein, a labor economist at the group, said in a statement.
Crude oil was trading around $126-$127 a barrel, after closing Friday at a record $126.29 a barrel.
High oil prices fueled concerns about the weary consumer and there was fresh chatter that the credit crunch isn't yet over.
"It looks to me like the consumer is trying to stay alive but there are some signs of exhaustion starting to build up," Art Cashin, director of floor operations for UBS, told CNBC. "The next three to six months, I think the market tries to punch through the upper end of the range," he said, but added, "I think they probably don't make it." Cashin said he thinks the Federal Reserve might even cut rates again, instead of preparing to begin raising them, as many expect.
Hewlett-Packard again advanced after taking a beating early last week over its proposed acquistion of IT-services firm EDS .
General Motors ticked higher, helping to keep the Dow's decline in check, amid hopes that a three-month strike at parts maker American Axle may soon be over. The UAW is putting to a vote a contract that would cut wages by nearly 40 percentand close three plants, while offering buyouts of up to $140,000.
The Microsoft-Yahoo saga took another turn with Microsoftproposing an alternative deal to Yahoo , rather than a full acquisition, in a move that could save the web pioneer from fighting a proxy battle with financier Carl Icahn.
Home-improvement retailers skidded after Lowe's beat earnings expectations but issued a cautious outlook for the rest of the year.
Rival Home Depot skidded ahead of its earnings report, due out Tuesday.
The debate continues on whether the worst of the credit crunch is behind or ahead, as grim warning signals are again being heard.
Consumers will cut spending because of the high oil and energy prices, and all that the recent rally in stocks has shown is that investors think shares offer a better cushion against inflation than bonds, Marc Faber, Editor and Publisher of “The Gloom, Boom & Doom Report”, told "Squawk Box Europe."
"I personally think we are just starting the credit crunch and it is going to be worse," he said. "I think the economy really stinks and the next sector to be hit, in America and elsewhere, is retail."
European Central Bank President Jean-Claude Trichet seemed to echo this view, saying that the market correction is still ongoing, and it is significant.
In other corporate news, Doug Kass, who famously shorted "everything related to housing" in 2007, told Barron's he has a short position in Warren Buffett's Berkshire Hathaway, largely because the company has suffered from a drift in its investment style.
And diversified manufacturer Manitowoc has increased its offer for British kitchen equipment makerEnodis to 1.08 billion pounds ($2.1 billion) to trump a rival offer from Illinois Tool Works.
TUESDAY: PPI; Fed's Kohn speaks; Earnings from Home Depot, Medtronic, Staples, Target and HP; Kentucky, Oregon primaries
WEDNESDAY: MBA mortgage applications; crude inventories; Fed's Warsh speaks; Fed minutes; Earnings from BJ's Wholesale
THURSDAY: Jobless claims; Fed's Kroszner speaks; Earnings from Gap; Libertarians choose presidential candidate
FRIDAY: Existing-home sales; Bond market closes early for Memorial Day holiday