The Dow Jones Industrial Average was up just 3 points at 13,361, as 17 of its 30 components fell.
The S&P 500 fell 3.9 points to 1,498, while the Nasdaq Composite fell 8.6 points to 2,580.
U.S. stocks took a heavy hit on Friday due to nervousness about a combination of rising Treasury yields, global interest rates and whether subprime lending woes have further to unwind. The Dow industrials dropped 185 points.
Investors first tried to snap up stocks that fell to attractive levels during the recent rout at Monday's open, but worries about credit deterioration were not from their minds.
"We appear to be looking in a 'glass half full' way at what caused the market to go down 2% last week," said Art Hogan, chief market strategist at Jefferies & Co.
"Equities are trying to adjust to higher yields," he said, referring to the fact that earlier in the month the yield on the 10-year Treaury note was driven above the federal funds rate, currently pegged at 5.25%, signaling expectations of higher rates.
"The stock market is trying to learn whether this points to growth or inflation," Hogan said. "If it is being driven by growth, then it is not a negative thing for stocks."
However, the Bank for International Settlements is sounding a cautionary note, according to a report on the Web site of the U.K.'s Telegraph newspaper.
The BIS is warning that years of loose monetary policy have helped pump up a dangerous credit bubble, leaving the global economy more exposed to a slump than is generally understood.
Indeed, the equities market last week played off near collapses of two Bear Stearns Cos. hedge funds, among other factors.
The slumping housing sector also has been a worry for financial markets.
At 10 a.m. Eastern, investors will get a look at data on existing-home sales figures for May. The MarketWatch forecast, based on a poll of economists, is for sales to have dropped to 5.90 million homes on an annualized basis last month, down a bit from 5.99 million in April.
Shares on the move
General Motors Corp. was up 2.9%. The leading U.S. automaker was upgraded to buy from neutral at Goldman Sachs, which said it was making a "tactical trading call" that shares will rise on expectations for sizable concessions from GM's unionized workers.
Dow Jones & Co. remained front and center on investors' radar screens.
According to The Wall Street Journal's online edition there were "intense" negotiations over protecting the editorial independence of the Journal. The newspaper cited people familiar with the matter. Dow Jones is the publisher of both the Wall Street Journal and of MarketWatch.
Dow Jones' stock was up 0.1% at $58.84, below the $60-a-share buyout price offered by News Corp.
and Rupert Murdoch.
Drugstore and personal-products chain Walgreen's reported a 20% increase in profit, citing strong prescription drug sales. The stock was up 1.6% at $45.69 before the opening.
The 10-year Treasury note last was up 5/32 at 95 10/32 with a yield of 5.105%. The bond market could be quiet until the Federal Reserve's meeting on interest rates, schedueld for Wednesday and Thursday.
The Fed's widely expected to leave rates on hold, but investors will be eager to see if the committee's accompanying statement hints at whether rate increases or reductions could be in store in coming months.
The yen remained under pressure, although there is growing talk of a possibility that the Bank of Japan may lift rates in the near future. The dollar last was off 0.2% at 123.61 yen, as the euro fell 0.04% to $1.3461.
Commoditis were backing lower in the early going, with the front-month oil contract off $1 at $68.14 a barrel and the August gold contract down $3.70 at $653.30 an ounce.
By Leslie Wines