NEW YORK (CNNMoney.com) -- Stocks ended a choppy session modestly lower Monday as investors welcomed a slight increase in personal spending but remained on guard ahead of key economic reports due later this week.
Stocks struggled for direction throughout the session as investors considered a pledge from world leaders to cut public deficits over the next few years.
Consumer staples were among the best performers after a report on personal spending came in somewhat better than expected and the Supreme Court issued a decision that will benefit tobacco companies.
Bank stocks were lower as investors continued to digest the Wall Street reform bill Congress finalized last week. Lawmakers are expected to vote on the sweeping overhaul this week and send the bill to President Obama in July.
Traders said the tone of Monday's session was cautious as the market remains nervous about the debt crisis in Europe and the possibility of a so-called double dip recession in the United States.
"The market is hungry for direction in terms of the labor market and industrial sector," said Nick Kalivas, vice president of financial research at MF Global. "We're in wait-and-see mode on those issues today."
Tuesday brings reports on home prices in 20 major U.S. cities and a key measure of consumer confidence. Manufacturing reports are due later in the week and the government's closely-watched monthly jobs report comes out Friday.
Stocks closed mixed Friday despite a rebound in the financial sector. All three major gauges booked weekly declines.
Economy: Before the open, the Commerce Department reported that personal income rose 0.4% in May, while personal spending edged up 0.2%.
The government was expected to report that personal income rose 0.5% in May after climbing 0.4% in April, according to a consensus estimate from Briefing.com.
Personal spending was expected to have risen 0.1% from a flat reading in April.
Companies: Tobacco companies Altria (MO, Fortune 500) and Philip Morris (PM, Fortune 500) rose after the Supreme Court refused to hear an appeal over the government's ability to collect $280 billion from the industry for alleged fraud in its marketing.
The Supreme Court also ruled unconstitutional a long-standing ban on hand guns in Chicago. Smith & Wesson Holding Corp (SWHC). jumped 5.6%.
Noble announced plans to buy FDR Holdings, an independent drilling company, in a cash transaction that values Frontier at $2.16 billion. Shares of Noble (NE) rose 2.4%.
Shares of BP (BP) rose after the oil company said it has spent $2.65 billion on costs related to the spill in the Gulf of Mexico.
G-20: Leaders of the world's most important economies agreed to ambitious targets for getting deficits under control, pledging to cut them in half by 2013, according to a statement made following the G-20 summit this weekend in Toronto.
But the leaders acknowledged that progress on deficit reduction will take more time for some countries, and included a special provision for Japan, which is heavily reliant on external borrowing.
World markets: Asian markets ended mixed Monday. Japan's Nikkei index lost 0.4%, while Hong Kong's Hang Seng index rose 0.2%.
Markets in Europe closed higher. France's CAC 40 and Germany's DAX both climbed more than 1% while Britain's FTSE 100 fell ended 0.5% higher.
Currencies: The dollar was higher against the euro, but was flat versus the British pound and Japanese yen.
Commodities: U.S. light crude oil for August delivery eased 90 cents to $77.96 a barrel.
COMEX gold's August contract fell $16.60 to $1,239.20 per ounce.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.96%||3.94%|
|15 yr fixed||3.33%||3.30%|
|30 yr refi||3.93%||3.92%|
|15 yr refi||3.29%||3.27%|
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