MarketView for March 29

Summary

The energy sector continued to be the source of strength for the markets on Tuesday, but uncertainty kept trading volume light. Approximately 6.2 billion shares changed hands on the three major exchanges, resulting in the second-weakest day of 2011 in terms of volume and far below last year's estimated daily average of 8.47 billion shares. The S&P 500 index is up about 4.9 percent in the first three months of the year, which would be its seventh positive quarter in the last eight.

Conviction has been weak as investors assess the effect of Japan's earthquake and turmoil in the Middle East on corporate results. Nonetheless, oil services stocks rose for a fifth session as investors continued to add to a sector sitting at its highest since August 2008. The PHLX oil services sector index .OSX rose 1.9 percent. All 10 of the S&P 500's major sectors rose, with energy .GSPE up 1 percent.

Oil rig contractor Rowan is bidding on 11 drilling opportunities in Saudi Arabia, sending its shares up 5.2 percent to $43.46. Oil prices have traded near multi-month highs recently, underpinned by weeks of unrest in Libya and in oil-exporting countries in the Middle East. Sweet domestic crude settled up 0.8 percent near $105 per barrel.

Volume was also weakened ahead of data on the labor front, including the ADP private-sector employment report on Wednesday and the government's key non-farm payrolls report on Friday.

Home Depot closed up 2.9 percent at $37.70, making it the Dow Jones industrial average’s best performer after the home improvement retailer said it would buy back $1 billion of outstanding shares through an accelerated program.

Amazon.com rose 3.1 percent to $174.62 after it introduced a service offering remote access to music, ahead of rivals Apple and Google. Cisco Systems gained 1.8 percent to $17.44 after it said it plans to buy software company newScale for an undisclosed amount to boost its cloud computing services.

Wall Street essentially ignored economic data indicating that consumer confidence fell in March as households worried about inflation, while home prices dropped for the seventh straight month in January.

Lennar, the third-largest homebuilder, fell 3.4 percent to $19.07 after reporting a drop in revenue.