US STOCKS-Wall St rally fizzles in lowest volume of 2011


 * Japan plant radiation, Libya violence still a concern
 * Telecom shares rise on analysts' upgrades
 * Marriott warns, other negative announcements expected
 * Dow off 0.2 pct, S&P off 0.3 pct, Nasdaq off 0.5 pct
* For up-to-the-minute market news see [STXNEWS/US]
 (Updates to close, changes byline)
 By Rodrigo Campos
 NEW YORK, March 28 (Reuters) - U.S. stocks fell on Monday
as the corporate outlook was clouded ahead of earnings and
uncertainty continued to creep from abroad, while volume hit
its lowest level of the year.
 A warning from hotel operator Marriott International hurt
hotel and other consumer shares, amid expectations of other
negative corporate earnings pre-announcements.
 "Corporations now have several excuses that seem to
resonate on Wall Street, from bad weather in January to the
Middle East to the Japanese earthquake impacting the supply
chain or sentiment," said Adam Parker, chief U.S. equity
strategist at Morgan Stanley, in a client note.
 Marriott International (MAR.N: Quote, Profile, Research) shares fell 6.3 percent to
$35.30.
 Stocks spent most of the day in positive territory, with
the S&P 500 hitting a session high near 1,320 for a second
straight session, driven by strength in the telecommunications
sector and consumer spending data.
 Japan's natural disasters and nuclear crisis along with
civil unrest in the Middle East and Libya have increased
market volatility in recent weeks.
 The Dow Jones industrial average (.DJI: Quote, Profile, Research) lost 22.71 points,
or 0.19 percent, to 12,197.88. The Standard & Poor's 500 Index
(.SPX: Quote, Profile, Research) fell 3.61 points, or 0.27 percent, to 1,310.19. The
Nasdaq Composite Index (.IXIC: Quote, Profile, Research) fell 12.38 points, or 0.45
percent, to 2,730.68.
 Analysts at Instinet in New York said a battle over the
territory just beyond the day's highs was likely to continue
in the upcoming sessions.
 "Over the very near term ... the odds point towards
another short-term firefight in the 1,320-1,330 area,"
Instinet's note said.
 That said, the S&P 500 has a good chance of making a new
2011 high over the next month or two, according to the
Instinet client note, as it is supported by a recent 7 percent
pullback and a plunge in a widely followed risk gauge (.VIX: Quote, Profile, Research).
 The S&P telecom index (.GSPL: Quote, Profile, Research) rose 1.4 percent after a
brokerage upgraded a number of companies, including Dow
components AT&T Inc (T.N: Quote, Profile, Research) and Verizon Communications Inc
(VZ.N: Quote, Profile, Research). [ID:nL3E7ES19O].
 AT&T rose 1.8 percent to $29.36 and Verizon gained 1.2
percent to $37.75, curbing losses in the blue-chip index.
 About 5.9 billion shares traded on the New York Stock
Exchange, NYSE Amex and Nasdaq -- the lowest volume in 2011.
Last Tuesday's 6.54 billion was the lowest until Monday.
 "From the point of view of a purchaser, to make a
commitment here, you have to think margins will keep expanding
and the Fed will stay easing," said Subodh Kumar, chief
investment strategist at Subodh Kumar & Associates in
Toronto.
 He said light volumes reflect investors' uncertainty on
those issues.
 U.S. consumer spending rose slightly more than forecast in
February, while inflation accelerated at its fastest pace
since June 2009. For details, see [ID:nCAT005399].
 Eastman Kodak Co (EK.N: Quote, Profile, Research), up 5.3 percent at $3.58, was the
NYSE's third-most active stock after a U.S. trade panel
agreed last week to review a case that could bring the
struggling photography company hundreds of millions of dollars
in royalties. [ID:nN25292900]
 EBay Inc (EBAY.O: Quote, Profile, Research) plans to buy e-commerce service provider
GSI Commerce (GSIC.O: Quote, Profile, Research) for nearly $2 billion to build up its
online marketplaces as it ramps up its battle with Amazon.com
Inc (AMZN.O: Quote, Profile, Research).
 GSI shares surged 50.7 percent to $29.20 in Nasdaq trading
while eBay shares lost 4.3 percent to $30.34 and Amazon slid
nearly 1 percent to $169.35.
 On Wall Street's worry front: Highly radioactive water has
leaked from a reactor at Japan's crippled nuclear complex, the
plant's operator said, while environmental group Greenpeace
said it had detected high levels of radiation outside an
exclusion zone, adding to mounting problems in Japan's battle
to contain the world's worst atomic crisis since Chernobyl.
For more see [ID:nL3E7ES0F3] and [ID:nTOPJP].
 Declining stocks outnumbered advancing ones on the NYSE by
1,765 to 1,214, while on the Nasdaq, about three stocks fell
for every two that rose.
 (Reporting by Rodrigo Campos; Editing by Jan Paschal)




US STOCKS-Wall St rally fizzles in lowest volume of 2011