NEW YORK (CNN/Money) - A basket of leading U.S. economic indicators was lower in July, a research group said Monday, as the economy continued to struggle to recover from a recession that began in early 2001.

The Conference Board, a private research group, said its index of leading economic indicators fell 0.4 percent to 111.7 after falling a revised 0.2 percent in June. Economists, on average, expected the index to fall 0.5 percent, according to Briefing.com.

It was the biggest drop for the index, which measures how the economy will look in three-to-six months, since a decline of 0.6 percent in September 2001, a month that included the Sept. 11 terrorist attacks.

Still, the Conference Board hastened to add that the reading was not as alarming as it first looked, being mostly the result of miserable stock market performance in July.

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"These are very different circumstances from September," Conference Board economist Ken Goldstein said. "This [reading] has a bigger component in terms of the stock market -- if the stock market hadn't fallen so much in July, the drop in the index would have only been 0.1 percent."

The report had little impact on U.S. stock prices Monday, which continued to move higher in early trade. Treasury bond prices also rose.

Six of the 10 leading indicators fell, including stock prices, average weekly manufacturing hours, consumer expectations, interest rate spread, vendor performance, and building permits.

Interest-rate spread measures the difference between short-term and long-term Treasury bond yields. Low short-term rates mean people and businesses are more likely to borrow and spend money in the short run, while high long-term rates indicate investors expect inflation to grow in the future as the economy picks up steam.

Vendor performance measures the time it takes suppliers to fill orders.

Real money supply, manufacturers' new orders for non-defense capital goods, falling average weekly initial claims for unemployment insurance, and rising manufacturers' new orders for consumer goods and materials were the only positive indicators for the economy.

The Conference Board's coincident index, measuring current economic conditions, rose 0.1 percent in July after rising 0.3 percent in June. Its lagging index rose 0.1 percent after falling 0.3 percent in June.

Some economists have begun to worry that the recent weakness in the stock market has sapped consumer confidence and caused businesses to be more cautious with their spending. If this persists, they fear the economy could fall back into a recession that some economists believe began in March 2001 -- the dreaded "double-dip" recession.

But Goldstein and most other economists say they believe the economy is still recovering and will pass through the latest turbulence relatively unscathed.

"You can't read a double dip into this, especially because so much of this is related to the stock market, rather than to the overall economy," Goldstein said. "The coincident index tells us where we are, which is in recovery. It's not really strong, but we're staying in it."