* U.S. service sector contracts at slower pace in June

* Oil falls over 4 pct to $64 a barrel, energy sector hit

* Dow up 0.2 pct, S&P off 0.4 pct, Nasdaq off 1 pct

* For up-to-the-minute market news click [STXNEWS/US] (Updates to mid-afternoon)

By Edward Krudy

NEW YORK, July 6 (Reuters) - The Nasdaq and the S&P 500 fell on Monday as concerns about the strength of an economic recovery kept pressure on stocks and commodity prices.

But the Dow industrials edged higher as some investors snapped up defensive stocks amid continued concern over the economy following last week's non-farm payrolls report.

Investors were also looking ahead to the start of second quarter earnings season on Wednesday for an indication of how corporations are weathering the economic downturn.