Despite Monday's pullback, stocks are on track to have their best August since 2000. Most of the gains were made earlier this month as investors cheered improvements in consumer confidence and an upbeat assessment of the economy from Federal Reserve Chairman Ben Bernanke.
Trading is expected to be relatively light this week, with many investors taking vacations. But there are still several important reports on the economy that could sway the market one way or the other.
The most closely watched piece of data this week will be the government's monthly jobs report on Friday. Economists are expecting another 220,000 jobs were lost, down from 247,000 in July.
Last month's report showed an unexpected dip in the unemployment rate and investors are anxious to see if the rate continues to fall. If fewer jobs are being lost, consumers might start to feel comfortable spending again and help get the economy back on its feet.
More than four stocks fell for every one that rose on the New York Stock Exchange, where volume came to 567.4 million shares, compared with 617.7 million at the same time on Friday.
In other trading, the Russell 2000 index of smaller companies fell 7.86, or 1.4%, to 572.00.