NEW YORK (CNN/Money) - Tech stocks rallied and the broader market ended mixed Monday as investors finally shifted funds to the beaten-up tech sector but showed caution with blue chips at 3-1/2 year highs.

The Nasdaq composite (up 19.60 to 2,090.21, Charts) gained around 1 percent.

The Dow Jones industrial average (down 3.69 to 10,936.86, Charts) ended the session down a few points. Earlier in the session, it had risen within 19 points of the 11,000 mark before retreating. The average stands just below its highest point since June 12, 2001.

The broader Standard & Poor's 500 (up 3.19 to 1,225.31, Charts) index crept higher and carved out a new 3-1/2 year high, closing at its highest point since July 3, 2001.

Bonds edged up and the dollar rose versus other major currencies. Oil prices inched higher.

Extended optimism from Friday's better-than-expected February job report, "and in general, a sense that the economy is doing better" helped spark the gains, said Gary Wolfer, senior Portfolio Manager at Univest Wealth Management and Trust.

As part of a broad market advance, the Dow has gained for five of the last six weeks. This run has set it up to potentially cross 11,000 in the short term, a level that is not technically meaningful, analysts say, but is nonetheless notable psychologically for investors.

Despite the recent broad advance for equities, technology has lagged, and the tech-heavy Nasdaq remains well below its highs of the year. As such, the Nasdaq was the most buoyant Monday, with investors putting money into tech shares, as well as continuing to put money into other sectors.

This week marks the fifth anniversary of the all-time high for the Nasdaq composite, reached in March 2000 near the end of the Internet bubble. The Nasdaq closed above 5,000 for the first time on March 9, 2000 and hit an all-time closing high of 5048.62 on March 10, 2000.

After the close, Texas Instruments (Research) narrowed its quarterly earnings targets to the lower end of previous forecasts, due to weaker demand for its chips. Shares fell 4 percent in after-hours trade.

A number of big cap tech stocks rose, boosting the Nasdaq. Gainers included Cisco Systems (up $0.20 to $18.24, Research), Oracle (up $0.32 to $13.60, Research), Yahoo! (up $0.73 to $33.09, Research), Intel (up $0.43 to $25.11, Research) and Microsoft (up $0.29 to $25.46, Research).

Intel and Microsoft are also Dow 30 components and helped boost that average, as did the Dow's other tech stocks, including Hewlett-Packard (up $0.31 to $20.87, Research).

Qualcomm (up $1.89 to $37.39, Research) rose after lifting its quarterly profit forecast due to stronger chip sales. The wireless telecom rose more than 5 percent during the session.

Biotech Celgene (up $5.20 to $33.88, Research) popped more than 18 percent in active Nasdaq trade after it said that late-stage trials showed that its blood cancer drug in combination with chemotherapy extended the time before patients relapsed.

The biggest decliners on the Dow were the more interest-rate sensitive stocks, including Alcoa (down $0.45 to $31.35, Research), Caterpillar (down $1.06 to $98.90, Research) and DuPont (down $0.60 to $53.95, Research).

Boeing (down $0.08 to $58.30, Research) ended the session little changed. The stock had been down earlier in the day after saying that its board had forced its president and CEO to resign due to a relationship the married executive had with a female executive.

Among other decliners, shares of Martha Stewart Living Omnimedia (down $2.78 to $27.97, Research) lost 9 percent after founder Martha Stewart spoke to employees and supporters in a televised address. Stewart was released Friday from a minimum-security prison, where she had served five months on felony charges related to a personal stock sale. (For more on this story, click here.)

In other news, a pair of big deals was announced.

Capital One Financial (down $2.08 to $76.00, Research) said it will buy Hibernia (up $5.67 to $32.24, Research) for $5.35 billion. Europe's BAE Systems said it will buy U.S.-based United Defense Industries (up $15.09 to $73.35, Research) for $3.97 billion in cash.

Market breadth was mixed. On the New York Stock Exchange, advancers beat decliners by more than 8 to 7 on volume of 1.49 billion shares. On the Nasdaq, decliners narrowly edged advancers on volume of 1.96 billion shares.

Oil prices ended the session higher, rising after a morning selloff. U.S. light crude for April delivery rose 11 cents to settle at $53.89 a barrel on the New York Mercantile Exchange.

Bond prices rose, lowering the 10-year note yield to 4.30 percent from 4.31 percent late Friday. Bond prices and yields move in opposite directions.

In currency trading, the dollar rose versus the euro and yen, recovering after a couple of down days.

COMEX gold rose 70 cents to $435.80 an ounce.

In global trade, Asian-Pacific stocks ended higher, and European shares ended mixed.