U.S. stocks ended the day barely changed on Monday as investors took a break from a four-day rally that lifted major indexes to 10-month highs.

Wall Street initially charged higher, but a sharp gain in U.S. Treasury debt prices, which drove benchmark yields lower, triggered a sell-off in stocks.

The broader market has been strengthening as U.S. and global economic data have given more signs that a turnaround is in the works.

We have been recently seeing a disconnect between the two markets. Stocks were up on economic optimism and bonds were up on economic concerns, said Peter Boockvar, equity strategist at Miller Tabak & Co, in New York.

Investors are finally catching up with this, and seeing Treasuries as a sign that they should not be buying so much, Boockvar said.

U.S. Treasury debt prices rose on Monday, with the 30-year bond gaining almost 2 full points, as investors did some bargain hunting after Friday's sharp losses and the Federal Reserve bought government debt.

The Dow Jones industrial average <.DJI> rose 3.32 points, or 0.03 percent, to end at 9,509.28. But the Standard & Poor's 500 Index <.SPX> inched down just 0.56 of a point, or 0.05 percent, to 1,025.57 and the Nasdaq Composite Index <.IXIC> shed 2.92 points, or 0.14 percent, to 2,017.98.

Earlier, the Dow rose as high as 9,587.73, while the S&P 500 climbed as high as 1,035.82, while the Nasdaq hit an intraday high at 2,036.03.

Analysts have been warning that the market's upbeat mood could be put to the test as a recent rally has pushed the S&P up about 52 percent from its 12-year closing low on March 9.

JPMORGAN AND INTEL FALL

Financial stocks, which were among last week's biggest advancers, lost their momentum partially after veteran bank analyst Richard Bove said 150 to 200 more U.S. banks would fail during the banking crisis.

SunTrust Banks Inc shares fell 3.8 percent to $21.79 after the company said lenders face more credit losses and commercial real estate may falter through 2010.

JPMorgan Chase slipped 1.5 percent to $43.01 and the Keefe, Bruyette & Woods index of bank shares <.BKX> dropped 1.6 percent.

The S&P financial index <.GSPF> fell 0.9 percent.

Financials are coming off and the whole market is just feeling a little bit tired ... the buyers stepped away a little bit, said Todd Leone, head of listed trading at Cowen & Co in New York.

Cisco Systems lost 0.6 percent to $22.06, and shares of chip maker Intel Corp fell 0.7 percent to $18.76, dragging on the Nasdaq.

On the upside, drugmaker Warner Chilcott soared 27.1 percent to $20.41 after the company said it would buy Procter & Gamble Co's
pharmaceuticals business for $3.1 billion.

FANNIE AND FREDDIE SOAR

Shares of Fannie Mae , the largest U.S. home funding company, and Freddie Mac , ended up sharply in

heavy trading volume. Fannie Mae surged 41.7 percent to $1.70 and Freddie Mac jumped 18.5 percent to $2.05 on news the companies were selling bills.

Energy stocks also advanced, in line with a rise in U.S. front-month crude oil prices, which topped $74 a barrel on Monday.

Valero Energy was up 2.3 percent at $18.91 and Murphy Oil rose 2.3 percent to $60.66. Chevron Corp , a Dow component, gained 1.5 percent to $70.76.

Volume was light on the New York Stock Exchange, with 1.23 billion shares changing hands, below last year's estimated daily average of 1.49 billion, while on the Nasdaq, about 2.06

billion shares traded, also below last year's daily average of 2.28 billion.

Advancing stocks slightly outnumbered declining ones on the NYSE by 1,543 to 1,474. On the Nasdaq, though, the opposite trend prevailed: About five stocks fell for every four that rose. (Editing by Jan Paschal)