Stocks ended a quiet trading session largely flat, with the Dow closing with a slight loss. Technology stocks gave a modest boost to the Nasdaq, which ended higher.
The Dow Jones Industrial Average fell 1.1 points, or 0.01 percent to 10,302.01, marking a fifth straight day of losses.
Cisco , Intel and Caterpillar led the advancers, while 3M and Boeing led the decliners.
TheS&P 500eked out a gain of 0.1 points, or 0.01 percent to 1,079.38, while the Nasdaq ended up 8.4 points, or 0.4 percent to 2,181.87. The CBOE Volatility Index, the widest gauge of fear in the market, fell below 26.
Technology and materials stocks rose, while health care, financials and telecom fell.
Last week marked the worst week for the marketsin the past six, with the major indexes falling 3 to 5 percent.
In positive economic news, bank lending standards at the biggest financial institutions are beginning to ease, according to the Federal Reserve's quarterly senior loan officer survey.
Nonetheless, despite some buying interest particularly in technology and materials, stocks traded in a narrow range much of the day. Volume on the New York Stock Exchange was light, with 787 million shares changing hands. Advancers led decliners 9 to 5.
"My perspective is the market’s focus is slowly turning from the great second quarter earnings reports to the emerging reality that the economy is slowing," said Alan Gayle, senior investment strategist for RidgeWorth Investments.
Gayle believes the markets will remain challenging to navigate for sometime, but said his firm believes a transition is underway from a "statistical bounce" to a "low trajectory sustainable recovery."
"What that means is the market is taking a much more conservative look at valuations," Gayle said, adding that the situation creates an opportunity. "There will be weakness through the rest of summer and into the fall, but because I believe the recovery is sustainable, we will see some pickup in the market as we finish up the fourth quarter."
In the tech sector, Cisco rose more than 2 percent and was one of the best performing Nasdaq stocks. Last week, the Internet network equipment maker tumbled following a disappointing revenue forecast.
Intel shares rose after the tech giant
Dell dipped after itannounced plans to buy 3PAR, a data storage company, for $18 per share in cash, or $1.15 billion, an 87 percent premium over 3PAR's price on Friday. And Brokerage Gleacher & Co cut its price target on Dell to $18 from $19.
Apple was down slightly after amanager was arrested Friday and indicted in an alleged kickback scheme involving Asian suppliers of accessories for the iPhone and iPod.
Research In Motion shares tumbled more than 4 percent after the BlackBerry maker assured Indian authorities of limited access to its Messenger servicesby Sept. 1, according to government sources. The company is also expected to hold talks later this week on giving access to enterprise mail.
Shares of credit card issuers Visa and MasterCard were mixed after U.S. credit card charge-offs and delinquencies fell in Julyat big credit card lenders as fewer Americans fell behind on their payments.
Financial stocks may see the effects of a clause in the Dodd-Frank financial reform bill that means many banks can buy back trust preferred securities, equity instruments that pay interest like bonds, before they lose their status as tier-one capital. Trups, as they are known, are an expensive form of capital and banks would like to replace them with cheaper forms.
Meanwhile, Bank of America said it is considering reducing its 35 percent stake in BlackRock, according to The Wall Street Journal.
On the earnings front, Lowe's shares rose slightly after the retailer turned in in slightly disappointing earnings and sales data and warned of a bleaker outlook ahead until the housing market turns around. Still, some traders thought the news from the home improvement retailer could have been worse. Rival Home Depot is expected to report Tuesday before the bell.
More insight on the health of the economy will come later this week when retailers Wal-Mart reports earnings before the bell Tuesday, and Target reports Wednesday.
Meanwhile, retailer Urban Outfitters and scientific-instrument maker Agilent are scheduled to report earnings this afternoon.