Profit-taking pushed the Dow lower as Boeing, a Dow component, said Chief Executive Officer Harry Stonecipher was asked to resign by the company's board for a relationship with a female executive. It is the second major CEO scandal for the aircraft manufacturer in less than 1 1/2 years.

However, investors were cheered by three separate merger announcements in the financial, defense and communications sectors — a sign of corporate America's confidence in economic growth. A jump in tech stocks, which had been lagging in the market's recent rally, reflected newfound confidence on the part of investors.

"If you're going to go higher, you have to have techs involved, and we're seeing that," said Todd Leone, managing director of equity trading at SG Cowen Securities. "Overall, the market seems pretty resilient. It looks like it wants to go to 11,000."

According to preliminary calculations, the Dow fell 3.69, or 0.03 percent, to 10,936.86, failing to top the 3›-year high reached Friday, when it rose 107 points.

The Dow reached 10,984.16 in intraday trading before moving lower in the final hour of trading.

Broader stock indicators gained ground. The Standard & Poor's 500 index was up 3.19, or 0.3 percent, at 1,225.31, also adding to its multiyear high from Friday. The Nasdaq composite index gained 19.60, or 1 percent, to 2,090.21 on the momentum of technology shares.

A late rise in crude oil futures helped send the Dow off its session highs. A barrel of light crude was quoted at $53.89, up 11 cents, on the New York Mercantile Exchange. Bonds rose, with the yield on the 10-year Treasury note falling to 4.3 percent, while the dollar rose against most major currencies and gold was up as well.

Analysts noted that investors were attracted to technology shares prior to Texas Instruments Inc.'s mid-quarter earnings update, due after the session, and National Semiconductor Corp.'s quarterly earnings on Thursday. While tech stocks have lagged behind the rest of the market, Friday's strong employment report from the Labor Department and subsequent runup in stocks encouraged many investors to re-enter the market.

"There's a lot of money coming back into the market right now," said Brian Williamson, an equity trader at The Boston Company Asset Management. "What we saw on Friday was encouraging for a lot of people, and it's great to see us building on that."

Texas Instruments added 48 cents to $27.37 during the session, then slipped 3 cents to $27.34 in after-hours electronic trading prior to its mid-quarter announcement.

Boeing said James Bell, the aerospace giant's chief financial officer, would serve as interim president and CEO while the company seeks a replacement for Stonecipher, whose predecessor, Phil Condit, resigned Dec. 1, 2003, in a defense contracting scandal. Boeing fell 8 cents to $58.30, recovering in the last hour from its session lows.

Sony Corp. was up 77 cents at $39.31 after the Japanese conglomerate named former CBC president Howard Stringer as chairman and CEO, hoping his entertainment experience will help the company with the convergence of its own entertainment holdings and its consumer electronics business.

Hibernia Corp. rose $5.67, or 21.3 percent, to $32.24 after Capital One Financial Corp. said it would pay more than $5.35 billion in cash and stock to acquire the Louisiana regional bank. Capital One, which hopes to bolster its banking business to help with distribution of its credit cards, fell $2.08 to $76 on the news.

Europe's BAE Systems PLC announced a $4.2 billion bid to buy United Defense Industries Inc., which includes the assumption of $218 million in UDI debt. BAE said the move will help the company attract more U.S. defense spending. UDI surged $15.09, or 25.9 percent, to $73.35.

Insight Communications Inc. climbed $2.07, or 21.4 percent, to $11.75 after private equity firm The Carlyle Group said it is offering $650 million, or $10.70 per share, to acquire the cable systems operator and take it private.

In earnings news, Marvel Enterprises Inc. said improved licensing revenue and movie merchandising related to "Spider-Man 2" helped the company beat Wall Street's quarterly profit expectations by 5 cents per share. Marvel slipped 45 cents to $18.

Advancing issues barely outnumbered decliners on the New York Stock Exchange, where volume was moderate.

The Russell 2000 index of smaller companies was down 1.09, or 0.2 percent, at 643.86.