NEW YORK (Reuters) - U.S. stocks rose modestly on Friday, rebounding after a string of declines with equities on track for their strongest quarter in more than two years.

The S&P 500 has fallen for three straight days but remains up 2.8 percent in March and ahead almost 12 percent for the first quarter. If could be the best start to the year since 1998 and the index's best quarter since the third period of 2009.

Some analysts look for a market pullback in the second quarter after the strong early run as investors seek confirmation the economic recovery will not stall.

Tech shares, which have surged 21.5 percent this quarter, are seen as vulnerable, especially if Apple Inc pulls back. The tech titan is up 51 percent over the quarter.

The S&P tech index dipped 0.1 percent early. Apple was off 0.6 percent to $606.52.

"I continue to be very cautious. I'm not all in on this market," said Joseph Cangemi, managing director at BNY ConvergEx Group in New York. "We're in a churning period right now, and while today's move is related to it being the end of the quarter, this is definitely a time for patience."

The Dow Jones industrial average was up 35.08 points, or 0.27 percent, at 13,180.90. The Standard & Poor's 500 Index added 3.09 points, or 0.22 percent, at 1,406.37. The Nasdaq Composite Index was down 0.59 points, or 0.02 percent, at 3,094.77.

The Nasdaq was pressured by weakness in chip shares, including Micron Technology Inc, down 2.1 percent to $8.24, and SanDisk Corp, off 1.7 percent to $49.34.

For the week, both the Dow and S&P are up 0.8 percent while the Nasdaq has jumped 1.1 percent.

A new round of data painted a mixed picture of the economic environment.

U.S. consumer spending in February increased by the most in seven months, even as personal income rose modestly, which could prompt analysts to scale back expectations of a sharp pullback in growth this quarter.

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.

In a more upbeat report, U.S. consumer confidence 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.

Research in Motion Ltd reported its first quarterly loss since 2005 late Thursday and said it will no longer issue forecasts, prompting analysts to cut stock price targets. After tumbling after hours, U.S.-listed shares rebounded 2.4 percent to $14.09.

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 , the Canadian company that makes the BlackBerry smartphones, surged 7.1 percent to $14.70 a day after it reported its first quarterly loss since 2005.

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)