Stocks edge higher; US service sector improves

NEW YORK - Worries from overseas held back the stock market on Monday.

Stocks started the day lower after a report showed that manufacturing in China, the world's second biggest economy, had contracted for the fourth straight month. News of more fighting between pro-Russian activists and soldiers in Ukraine also made investors cautious.

The negative news was offset by a report that showed U.S. service firms grew more quickly last month as sales and new orders rose. Stocks climbed after the report was released mid-morning and ended the day higher, but the gains were slight. Stocks remain close to all-times highs, and investors still appear unwilling to push the market higher even amid signs that the U.S. economy is strengthening.

The Standard & Poor's 500 index rose 3.52 points, or 0.2 percent, to 1,884.66. The index is six points below its record close of 1,890 set on April 2. The Dow Jones industrial average rose 17.66 points, or 0.1 percent, to 16,530.55. The Nasdaq composite rose 14.16 points, or 0.3 percent, to 4,138.06.

Utilities stocks rose the most in the S&P 500 index. The utility sector has risen 12.5 percent this year, making it the best performing industry group in the S&P 500. Utilities stocks typically pay big dividends and have been popular with investors as bond yields have fallen this year, said Kristina Hooper, U.S. investment strategist at Allianz Global Investors.