By Rodrigo Campos
NEW YORK (Reuters) - Stocks closed their strongest quarter in more than two years on a positive note on Friday, led by recently underperforming sectors, including energy and health care.
Despite falling six out of the last nine sessions, the S&P 500 gained 12 percent in the first quarter, its best start of the year since 1998 and the best overall quarter since the third quarter of 2009. The broad-market average sits just off four-year highs.
Apple shares, down 1.7 percent at $599.55, ranked among the day's losers and reined in the Nasdaq. Still, the iPhone maker's stock soared 48 percent this quarter to close with a market capitalization of $558.9 billion.
Investors flocked Friday to consumer-oriented shares after data showed U.S. consumer spending rose by the most in seven months in February, though personal income rose only modestly.
The S&P consumer staples sector index <.GSPS> rose 0.65 percent in Friday's session.
The S&P health-care sector index <.GSPA>, up a relatively low 8.4 percent in the quarter, gained 0.75 percent on Friday.
Recently battered energy shares also rose, with the PHLX oil service sector index <.OSX> up 1.7 percent for the day. For the quarter, the oil service sector index jumped 10.1 percent.
The S&P technology sector index <.GSPT>, up 21.1 percent this quarter, was the only one among the S&P's top 10 sectors to trade lower for the day. The index was off 0.36 percent.
"If there's no real bad news and the Fed is pushing money into the economy, markets tend to go higher," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York.
An ultra loose monetary policy from the U.S. Federal Reserve, which has kept interest rates at historic lows, is widely seen as one of the engines of the recent rally in stocks.
Looking ahead, Manley said the technology sector could continue to lead the market higher.
"The full upgrade cycle has not been completed yet and corporations are still catching up in technology," he said.
The Dow Jones industrial average <.DJI> gained 66.22 points, or 0.50 percent, to 13,212.04 at the close. The S&P 500 Index <.SPX> gained 5.19 points, or 0.37 percent, to 1,408.47. The Nasdaq Composite <.IXIC> dipped 3.79 points, or 0.12 percent, to 3,091.57.
Volume was lackluster during the quarter, with an average 6.82 billion shares traded daily on the New York Stock Exchange, Nasdaq and NYSE Amex, down from last year's 7.94 billion average in the first three months.
On Friday, about 6.5 billion shares changed hands.
Following a stellar first quarter, U.S. stock investors will focus next week on the March nonfarm payrolls report. Their attention will then turn to earnings season starting in the second week of April.
Analysts said investors will take note of guidance as they assess the toll that Europe's near-recessionary conditions and China's slowdown will take on U.S. corporate earnings. Companies' expectations of the effect that rising oil prices will have on consumers will also be of interest.
The pace of business activity in the U.S. Midwest slowed more than expected in March as employment and new orders dropped from elevated levels last month, according to the Chicago PMI report from the Institute for Supply Management-Chicago.
In a more upbeat report, U.S. consumer sentiment rebounded to its highest level in more than a year in March as optimism about jobs and income overcame higher prices at the gasoline pump, according to the Thomson Reuters/University of Michigan Surveys of Consumers.
After several weeks of better-than-forecast data, economic indicators have shown signs of slackening. The trend echoes last year's market peak in the first half of the year.
The U.S.-listed shares of Research in Motion Ltd
In a candid diagnosis of the company's problems, the new chief executive said on Thursday he might consider selling RIM, but he stopped short of saying that was the direction he was taking.
On Friday, about seven issues rose for every five that fell on the NYSE, while on the Nasdaq, decliners beat advancers by more than eight to seven.
(Editing by Jan Paschal)