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A warning from hotel operator Marriott that hurt hotel and other consumer shares during the regular session was followed after the bell by oilfield services company Halliburton Co's (HAL.N) announcement that first-quarter earnings could be trimmed.

"A good quarter is baked in right now, but I think there are going to be a lot of surprises, the latest one from Halliburton," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

He said among the main issues facing the next quarter's earnings are geopolitical issues emanating from northern Africa and the Middle East, the aftermath of Japan's natural disasters and nuclear crisis, and rising input costs.

"If companies can't pass along the price increases, we're going to see some problems and that's where earnings are going to start to have an issue," Saluzzi said. "Unless they pass it on and then we have inflation ... so pick your poison."

Marriott International (MAR.N) shares fell 6.3 percent to $35.30 during the regular session, while Halliburton dropped 1.9 percent to $47 after the bell.

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.

The Dow Jones industrial average .DJI lost 22.71 points, or 0.19 percent, to 12,197.88. The Standard & Poor's 500 Index .SPX fell 3.61 points, or 0.27 percent, to 1,310.19. The Nasdaq Composite Index .IXIC 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 on the S&P 500 was likely to continue in the upcoming sessions.

"Over the very near term ... the odds point toward another short-term firefight in the 1,320-1,330 area," Instinet's note said.

The S&P telecom index .GSPL rose 1.4 percent after a brokerage upgraded a number of companies, including Dow components AT&T Inc (T.N) and Verizon Communications Inc (VZ.N).

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.

EBay said on Monday it offered GSI shareholders $29.25 per share, a 50.9 percent premium over its closing price on Friday. Shares rose by the same amount in Monday's Nasdaq trading. EBay

shares were down 3 percent.

GSI owns Web businesses such as Rue La La, which offers one-day-only deals to its members, and ShopRunner, a members-only online shopping service that offers free shipping. GSI also provides technology, payment processing and customer care services for e-commerce sites.

In a statement, EBay Chief Executive John Donahoe said the deal would help the company connect more buyers and sellers.

EBay said the acquisition, expected to close in the third quarter of 2011, would have little effect on its fiscal 2011 adjusted earnings forecast, and would add to 2012 earnings. EBay said the deal would hurt 2011 net income by 30 cents to 34 cents per share.

As part of the deal, EBay will sell off GSI's licensed sports merchandise business and 70 percent of ShopRunner and Rue La La, which will all become part of a new holding company run by GSI's founder and Chief Executive Michael Rubin.

EBay will lend Rubin's new company $467 million. Including the loan, eBay said the deal was worth $2.4 billion.

EBay said those business were not important to its long term growth strategy but it will keep a 30 percent stake in both Rue La La and Shop Runner.

GSI has until May 6 to solicit bids from other parties during the so-called "go shop" period.

EBay has pointed to its PayPal payments processing unit as its prime growth driver in recent years.

But it is also trying to spark growth at its more familiar marketplaces unit, a high-margin business that connects online buyers and sellers.

(Reporting by Phil Wahba; Editing by Derek Caney)

The Commerce Department said spending rose 0.7 percent after an upwardly revised 0.3 percent gain in January.

Economists polled by Reuters had expected spending, which accounts for about 70 percent of U.S. economic activity, to advance 0.6 percent in February after a previously reported 0.2 percent rise.

Spending adjusted for inflation increased 0.3 percent last month after being flat the prior month. After increasing at its fastest clip in four years in the final three months of 2010, consumer spending is expected to slow in the first quarter, with rising energy and food prices stealing from spending on other goods and services.

Spending grew at a 4.0 percent annual rate in the fourth quarter, helping to lift overall economic growth to a 3.1 percent pace during the quarter from 2.6 percent in the July-September period.

High food and energy prices pushed up overall inflation last month. The Commerce Department said the personal consumption expenditures price (PCE) index rose 0.4 percent, the fastest since June 2009, after gaining 0.3 percent in January

The Federal Reserve's preferred measure of consumer inflation -- the core PCE index excluding food and energy -- increased 0.2 percent after rising by the same margin in January. In the 12 months through January, the core PCE index rose 0.9 percent, the fastest rise in four months, after rising 0.8 percent in January.

The Federal Reserve so far views the high food and energy prices as transitory, but Chairman Ben Bernanke said he would act to ensure an inflationary psychology does not take root.

Incomes rose 0.3 percent last month after rising 1.2 percent in January. That compared with economists' expectations for a 0.4 percent gain.

With consumption outpacing the growth in incomes, savings fell to $676.7 billion from $710.5 billion in January. (Reporting by Lucia Mutikani, Editing by Andrea Ricci)

Reports of soaring radiation levels at a damaged nuclear plant in Japan renewed worries over the country's reactors after an earthquake and tsunami, though Nikkei futures began to recover.

In the Middle East and North Africa, violence spread as rebels in Libya pushed west over the weekend to retake a series of towns from the forces of Muammar Gaddafi. In Syria, President Bashar al-Assad deployed the army in the country's main port of Latakia for the first time after nearly two weeks of protests spread across the country.

The issues surrounding Japan's nuclear disaster and civil unrest have pressured markets in recent weeks, and while much of those losses have been recouped, the volume of trade has been limited as investors continue to watch headlines closely for trading cues.

"Those issues are still lingering with the market, though I don't think as much attention is being paid as two weeks ago," said Robert Pavlik, chief market strategist at Banyan Partners LLC in Palm Beach Gardens, Florida. "There's more confidence now that we've recovered from the drop we saw on the news."

Market participants are also looking ahead to February personal income and consumption data, due at 8:30 a.m.. Income is seen rising 0.4 percent while consumption is seen rising 0.6 percent.

S&P 500 futures rose 2.8 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 21 points and Nasdaq 100 futures rose 8 points.

Robert W. Baird upgraded a number of telecom companies to "outperform," including Dow components AT&T Inc (T.N) and Verizon Communications Inc (VZ.N), saying AT&T's deal to buy T-Mobile would help stabilize the hyper-competitive industry.

U.S.-listed shares of Nokia Corp (NOK.N) rose 3.2 percent to $8.62 in premarket trading as Goldman Sachs upgraded the stock to "buy," citing the handset maker's long-term growth potential.

Eastman Kodak Co (EK.N) surged 19 percent to $4.05 in premarket trading after a U.S. trade panel agreed to review the company's claim that Research in Motion Ltd (RIM.TO)(RIMM.O) and Apple Inc (AAPL.O) are infringing on Kodak's patents.

U.S. pending home sales for February, due from the National Association of Realtors at 10 a.m., are seen falling by 1 percent after a string of weaker-than-expected data for the battered housing sector.

A strong forecast from Oracle Corp (ORCL.O) lifted Wall Street to a third straight day of gains on Friday, giving the S&P its best weekly performance since early February, but volume remained light.

(Editing by Padraic Cassidy)

Glencore, valued earlier this year by one analyst at about $60 billion, is looking to ditch its long-standing partnership structure in favor of life as a public company, which will make it easier to reward partners and make acquisitions.

The company has been keeping its listing plans under wraps since briefing analysts earlier this month, but is expected to list shares in both Hong Kong and London in what could be the UK's biggest ever initial public offering (IPO).

Glencore, based in Baar, Switzerland, and the Hong Kong exchange declined to comment on the IPO plans.

The exchange's listing committee regularly meets on Thursdays. Occasionally, it meets earlier in the week to review large offerings.

Asked if Glencore would be meeting the exchange on Thursday, two sources confirmed they would. A third source said the offer was "moving forward."

The sources declined to be identified because they were not authorized to speak to the media.

The company has met with investors in the past weeks to gauge interest in an offering, with several of its key trading partners in Asia showing interest to buy the stock.

One possible deal post-IPO the group led by chief executive Ivan Glasenberg may look at is a merger with Xstrata (XTA.L), the Swiss miner it already part-owns.

Asia's biggest sovereign wealth funds and some Hong Kong billionaires are seen as likely to invest in the IPO as cornerstone investors. Such investors are common to many large Asian IPOs and they are assured firm commitments in the offer.

'TOO BIG TO FAIL'

Volatility in global markets after the deadly earthquake and tsunami in Japan, coupled with the political turmoil in the Middle East over the past several weeks have prompted several companies to delay planned IPOs, raising some doubts whether Glencore would move ahead with its listing.

If all goes to plan, Glencore could kick off its listing during the first week of April with a so-called intention to float announcement in London.

That would follow an April 1 deadline for sell-side analysts to complete their research notes on the company.

Assuming Glencore follows the usual four-week IPO process, that would allow it to complete the listing in early May.

Wal-Mart has 371 stores and 43 deli outlets in Japan, of which 24 were affected by the March 11 earthquake and tsunami that left more than 27,000 people dead or missing across Japan's devastated northeast.

Of Wal-Mart's affected stores, two were severely hit and were completely covered by mud, said Wal-Mart Asia's Vice President of Corporate Affairs, Anthony Rose.

The remaining 22 affected stores managed to operate out of parking lots in some form within hours of the disaster, and were giving away bottled water and items such as noodles while selling some limited items, Rose said.

Wal-Mart said the 12 returning to full operations on Monday are located in Sendai City and in a suburb of Sendai. The other 12 will reopen as soon as possible, said Rose, who is based in Hong Kong.

"Wal-Mart has a lot of experience of dealing with disasters learning from the earthquakes in china, Chile and also the Katrina disaster to name a few," said Scott Price, president and CEO of Wal-Mart Asia in a statement emailed by Rose.

"Within minutes of the earthquake in Japan, we activated our emergency operations center in Bentonville and command centers in Tokyo and Hong Kong," Price said in the statement.

(Editing by Vinu Pilakkott)

European shares .EU also were set to dip in early trade, though U.S. stock index futures pointed to a possibly firmer opening on Wall Street later in the day.

Investors in Asia booked profits on bank shares in Hong Kong, computer maker stocks in Taiwan and in mining shares in Australia, weighing on the region's equity markets after those sectors racked up solid gains over the last week.

However, most analysts reckoned Asian stock markets would bounce back on foreign demand after the first quarter and Japan's fiscal year comes to a close later this week.

"There's still room to rise as foreign buying on dips is likely to continue, although trading may be directionless before the end of the fiscal year," said Hajime Nakajima, a wholesale trader at Cosmo Securities in Tokyo.

Japan's Nikkei .N225 finished down 0.6 percent. Shares elsewhere in Asia were mainly weaker, with MSCI's index of Asian shares outside Japan .MIAPJ0000PUS easing 0.4 percent.

GERMAN ELECTION HURTS EURO

Merkel's Christian Democrats lost power on Sunday in the rich state of Baden-Wuerttemberg, where a rush of anti-nuclear sentiment following Japan's nuclear crisis mobilized voters against the party, which has been supportive of nuclear power.

The loss of the regional stronghold could limit Merkel's ability to pass legislation as her coalition center-right government deals with nuclear power, military action in Libya and the euro zone debt crisis.

While erosion of Merkel's clout at home weighed on the euro, prospects of a European Central Bank rate was an important element holding up the single currency, Gibbs said.

"Clearly risks are rising, but not sufficient to tip the euro over the edge yet. There's also a range of support on the way down, it's not going to collapse even if it falls through $1.40," said Greg Gibbs, a strategist at RBS in Sydney.

The euro last traded at $1.4061, compared with $1.4065 late in New York on Friday. Early in the session, it was marked down to around $1.4020.

Along with its gains versus the euro, the dollar firmed against the yen, helped by Friday's comments from a U.S. central bank official who said the Federal Reserve is poised in the "not-too-distant future" to begin rolling back its super loose monetary policy to avert inflation.

Easier U.S. policy has helped boost global financial markets by flooding them with cheap money in search of higher returns, though it has also added to inflationary pressures in emerging economies.

The U.S. dollar last traded at 81.70 yen, up from 81.43 late Friday in New York.

But worries about Japan, the Middle East and oil prices will persist and keep uncertainty high, analysts said, even as the VIX, the CBOE Volatility Index .VIX, slid 27 percent over the past week.

Another driver could come from economic data, with the U.S. government's March payrolls report -- the most widely watched economic indicator of the month -- due on Friday.

Economic data lately has taken a backseat to geopolitical events, with Japan's massive earthquake and tsunami sparking fears of a nuclear disaster in the country and driving the most recent pullback in stocks.

But many expect window dressing, where fund managers sell stocks with big losses and buy ones with big gains to spruce up their portfolio's quarterly performance, to dominate trading.

"I think a number of people viewed the harshness of the sell-off as an opportunity to pick up some inappropriately punished stocks," said Michael Strauss, chief economist of Wilton, Connecticut-based Commonfund.

The strategy contributed to a bounceback late last week, with the Dow Jones industrial average .DJI and Nasdaq .IXIC posting their best weeks since July. The benchmark Standard & Poor's 500 .SPX had its best week since early February.

Analysts say the stock market's recent performance has been strongly influenced by expectations for the upcoming earnings reporting period, which kicks off the second week of April.

Oracle's upbeat outlook late Thursday and its stock's 1.6 percent rise on Friday is one example of that, while the energy sector has benefited from the view that the run-up in oil prices will mean stronger-than-anticipated results for producers and refiners.

KING OIL

Energy, up about 14 percent since the start of the quarter as measured by the S&P energy index .GSPE, is by far the sector with the biggest gains for the quarter to date.

Brent crude oil prices are trading at $115 a barrel, just off recent 2 1/2-year highs, as Western powers last weekend launched a military campaign in oil producer Libya and unrest escalated in other countries, including Yemen and Bahrain.

While higher oil prices are seen as an overall drag on the global economy, they boost the earnings and shares of energy companies.

"If they're able to sell oil at anywhere near the spot prices, they should post a really good quarter, and we're already seeing that in the stock prices," said Fred Dickson, chief market strategist of D.A. Davidson & Co. in Lake Oswego, Oregon.

Marathon Oil (MRO.N), up about 40 percent for the quarter to date, has the fourth-best gain in the S&P 500 for the last three months, and energy companies dominate the quarter's top performers. El Paso Corp (EP.N) is up 31 percent and Valero Energy (VLO.N) is up 30 percent.