* Oil prices slide more than 3 pct to near $64 a barrel
* U.S. service sector contracts at slower pace in June
* Dow off 0.4 pct, S&P off 0.7 pct, Nasdaq off 1.3 pct (Updates to early afternoon)
By Ryan Vlastelica
NEW YORK, July 6 (Reuters) - U.S. stock indexes fell on Monday as investor concerns about the potential strength and timing of an economic recovery weighed on stocks and pressured crude oil prices.
While data released earlier on Monday showed that the U.S. service sector contracted in June at a slower pace than expected, market sentiment continued to be driven by last week's worse-than-expected jobs report.
On Thursday, the U.S. Labor Department reported a decline of 467,000 in nonfarm payrolls, nearly 100,000 more than expected.
"We had a little downdraft late last week with the jobs report and this is a continuation of that," said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois.
August crude futures touched a five-week low and fell 3.5 percent to $64.38 per barrel on Monday, sending Marathon Oil Corp and Holly Corp down 3.8 percent to $27.90 and 4.5 percent to $17.78, respectively.
Strong commodity prices have been viewed as a signal the global economy is finding its footing.
"In terms of commodities, I think everyone's mindset is back in last year, when oil reached an all-time high," said Scott Thomas, director for client relations at Astor Asset Management in Chicago. The decline in oil prices will have "a larger impact on the market than you would normally see" because of the commodity's recent volatility, he said.
The Dow Jones industrial average fell 32.57 points, or 0.39 percent, to 8,248.47. The Standard & Poor's 500 Index lost 5.78 points, or 0.65 percent, to 890.62. The Nasdaq Composite Index gave up 24.09 points, or 1.33 percent, to 1,772.57.
The S&P 500 is up about 31 percent from March's 12-year low, following a rally spurred by bets the economy will show signs of recovery later in the year.
Investors were also focused on the start of the second-quarter earnings season, which unofficially begins with Alcoa Inc later this week. Alcoa, a Dow component, fell 8.4 percent to $9.03 on a decline in commodity prices.
"I would definitely expect some underperformance" in second-quarter results, Thomas said. "The economic numbers are going to trickle back to the more micro stuff, such as earnings. I definitely think the market could see a correction to the downside during the season."
Bucking the trend, American Express Co led the Dow percentage gainers list, climbing 3.8 percent to $23.12 after Stifel Nicolaus upgraded the company, saying it was the least exposed to new rules on the credit card sector. (Editing by Padraic Cassidy)