NEW YORK (CNN/Money) - U.S. stocks ended lower Monday, as cautious investors pulled money out of the market after three weeks of gains and ahead of key economic data due later in the week.

The Dow Jones industrial average (down 75.95 to 8368.04, Charts) dipped 0.9 percent, while the Nasdaq Composite (down 15.26 to 1315.87, Charts) closed 1.1 percent lower. The Standard & Poor's 500 index (down 7.42 to 890.23, Charts) slipped 0.8 percent.

Stocks meandered on either side of breakeven for most of the trading session before selling accelerated in the final hour of trading.

"The market is trying to build a base in what is the third-longest bear market in history. It's not going to end in one day when you're not paying attention. This is a process that you have to go through," Michael Carty, stock market strategist with New Millennium Advisors, told CNNfn's Street Sweep.

Analysts said the wishy-washy session and a "healthy" course of profit-taking was expected following a three-week runup for stocks. The Dow has gained nearly 16 percent since its Oct. 9 low. All major indexes are up more than 10 percent for the month.

Market breadth was negative amid heavy volume. On the New York Stock Exchange, decliners edged advancers about 2-to-1 as a 1.6 billion shares traded. On the Nasdaq, winners edged losers 7-to-6 as 1.3 billion shares changed hands.

Weakness in aerospace and defense stocks hurt the Dow and the broader market, countering positive news for Citigroup, Merck and American Express. Among tech issues, storage and networking stocks lost value.

"We [saw] a tug-of-war between the bulls and the bears today," said James Awad, stock market strategist with Awad Asset Management. "The bulls say the market can discount bad economic news, like last Friday's consumer confidence and durable goods numbers, and investors should get in before it's too late.

"The bears say that after a three-week runup, the market is in 'La-La Land,' ahead of itself, and investors should take profits now. Friday's data will provide a more definitive direction for which way the market will go," Awad added.

As the corporate reporting period winds down in the coming days, the economy again becomes front and center with investors.

Friday will offer a double dose of news, bringing crucial reads on the October employment number and the Institute for Supply Management purchasing managers' index.

Two other reports --Tuesday's consumer confidence number and Thursday's first take on third-quarter gross domestic product -- will be closely watched.

October may hold up its reputation as a "bear-killer," with the major indexes looking to wrap up the month solidly in the black after stocks locked in their third consecutive weekly advance last week.

Procter & Gamble (PG: down $2.95 to $85.75, Research, Estimates) was a drag on the blue-chip index, countering the positive news out of financials and drug stocks. Analysts said the stock was seeing selling from institutional investors, who were rotating out of the consumer products group into cyclical stocks and tech issues, especially on the back of dour news from Gillette (G: down $0.25 to $28.52, Research, Estimates) and Newell Rubbermaid (NWL: down $1.79 to $32.40, Research, Estimates).

Aerospace firm Goodrich (GR: down $1.04 to $15.45, Research, Estimates) missed estimates for its third quarter and warned of a profit shortfall going forward due to softness in the travel industry. The company's forecast also pulled down shares of Boeing (BA: down $1.34 to $28.98, Research, Estimates).

Blue chips attempted to get some leverage earlier from a Lehman Brothers upgrade of financial services company Citigroup (C: up $0.60 to $36.30, Research, Estimates) to "overweight" from "equal-weight." Lehman said it believes a "double dip" in the economy appears less likely and therefore upped its sector outlook to "neutral" from "negative."

Financial services provider American Express (AXP: up $1.12 to $34.25, Research, Estimates) posted a third-quarter profit of 52 cents a share, beating Wall Street estimates by a penny.

But early gains for brokerage stocks were tempered by a bearish note from Prudential Securities. Prudential slashed its 2003 estimates on a slew of brokerage firms, including Merrill Lynch (MER: down $0.57 to $39.42, Research, Estimates), Goldman Sachs (GS: down $0.41 to $73.58, Research, Estimates) and Lehman Brothers (LEH: down $0.36 to $56.12, Research, Estimates), citing weak momentum going into 2003 and a cooling environment for investing banking business.

Elsewhere among the Dow stocks, shares of drugmaker Merck were lifted from a Banc of America upgrade to "buy" from "market perform," as well as news that a new cholesterol-fighting drug co-developed by Merck (MRK: up $1.32 to $54.23, Research, Estimates) and Schering-Plough (SGP: up $0.78 to $21.13, Research, Estimates), received approval from the Food and Drug Administration (FDA).

Among tech leaders, IBM (IBM: up $2.00 to $76.56, Research, Estimates) shares gained after the company announced a "triple zero" offering -- zero down, zero payments and zero interest until 2003 -- to allow more of its midsized to large enterprise customers acquire the company's hardware and software products.

But Brocade Communications (BRCD: down $1.42 to $6.83, Research, Estimates), the provider of storage area networks (SANs) and Cisco Systems (CSCO: down $0.88 to $10.90, Research, Estimates) blotted the tech landscape. Brocade cut its fourth-quarter outlook, citing continued weakness in information technology spending. Morgan Stanley downgraded Cisco Systems to "equal-weight," citing valuation concerns.

European markets ended higher on strength in insurance and tech issues, while Asian-Pacific stocks finished mostly higher Monday; before the Sony and Honda results.

Treasury prices were mixed, with the yield on the 10-year note at 4.07 percent. The dollar was weaker against the yen and the euro.

Light crude oil futures rose 24 cents to $27.29 a barrel in U.S. trading. Gold was higher.