With no new reports to offer clues about the economy, investors traded cautiously ahead of the Fed's latest move on interest rates when policymakers meet Wednesday. Last Friday, signs of moderating job growth fueled hopes that a cooling economy would prompt the central bank to consider pausing its rate tightening.

"I think you'll see a lot of waffling" ahead of the Fed meeting, said Rick Pendergraft, an equity trader at Schaeffer's Investment Research. "Everyone is pretty much expecting a quarter percentage point lift this time, but it's up in the air for the June meeting."

Meanwhile, the market showed some excitement over Wachovia's $25 billion takeover of Golden West Financial Corp. and Thermo's $10.6 billion offer for Fisher Scientific International Inc. Berkshire Hathaway Inc. also made its first acquisition of an overseas company.

The Dow Jones industrial average rose 6.80, or 0.06 percent, to 11,584.54, its highest close in more than six years. The Dow is 138 points from its all-time high of 11,722.98, reached on Jan. 14, 2000.

Broader stock indicators stood near their highs from February 2001. The Standard & Poor's 500 index fell 1.10, or 0.08 percent, to 1,324.66, and the Nasdaq composite index gained 2.42, or 0.1 percent, to 2,344.99.

The interest rate debate weighed on the dollar and bonds, with the yield on the 10-year Treasury note ticking up to 5.12 percent from 5.11 percent late Friday. The U.S. dollar plunged against the Japanese yen and was slightly lower versus European currencies.

Analysts say Wall Street's nervousness about the Fed's next move on interest rates is restraining stocks even though the Dow is within reach of its all-time high. While most believe the central bank will raise the nation's key lending rate to 5 percent Wednesday, investors will be picking apart the Fed's policy statement for signs of whether more hikes are coming.

Still, investors have been impressed by the economy's strength despite surging energy costs and the Fed's mission to stifle inflation by gradually raising short-term interest rates. Enthusiasm over solid corporate earnings growth — companies in the S&P 500 index have averaged double-digit gains for 15 consecutive quarters — have carried stocks sharply higher so far this year.

But the question remains: If the Dow breaks through its high, can the market keep pressing upward?

"If we remove everything else and base it on the fundamentals — absolutely," said Art Hogan, chief market analyst for Jefferies & Co. "But there are other forces out there we have to contend with, and they won't go away just because we've set a new record."

Tapering motor fuel demand eased the energy market's worries about Iran's nuclear arms program. A barrel of light crude sank 42 cents to settle at $69.77 on the New York Mercantile Exchange, where gasoline also dropped 3.7 cents to $2.004 per gallon.

Wachovia agreed to acquire Golden West for $25 billion. The $81.07-per-share offer is a 15 percent premium to Golden West's Friday closing price. Golden West rose $4.39 to $74.90, and Wachovia slid $3.97 to $55.42.

Thermo is buying Fisher for $10.6 billion in stock, forming a massive producer of scientific equipment for laboratory and health sciences. Fisher gained $2.22 to $75.95, and Thermo lost 91 cents to $38.54.

Berkshire on Friday said it is buying an 80 percent stake in Israel-based Iscar Metalworking Cos. for $5 billion. Berkshire rose $490 to $89,200.

Intel Corp. advanced 60 cents to $20.11 after analysts at Caris & Co. and American Technology Research upgraded the chipmaker to "buy" ratings, citing a strong outlook and reasonable valuation.

Advancing issues were slightly behind decliners on the New York Stock Exchange, where preliminary consolidated volume of 2.24 billion shares trailed the 2.4 billion shares that changed hands on Friday.

The Russell 2000 index of smaller companies fell 0.23, or 0.03 percent, to 781.60.

Overseas, Japan's Nikkei stock average surged 1.69 percent. Britain's FTSE 100 lost 0.4 percent, Germany's DAX index added 0.24 percent and France's CAC-40 was lower by 0.08 percent.