Energy and material stocks led gainers on the S&P 500 on Tuesday in a thinly traded session in which major indexes barely budged.

On the back of stronger oil prices. the S&P energy sector <.GSPE> rose 0.4 percent, while the S&P materials index <.GSPM> gained 0.2 percent.

Downbeat economic data kept the market in check. Consumer confidence unexpectedly deteriorated in December, hurt by increasing worries about the labor market, while the price of U.S. single-family homes fell almost double the expected pace in October.

It (the data) was a negative surprise, but it's not impacting the market due to the lack of volume and lack of activity the market today, said Peter Cardillo, chief market economist at Avalon Partners in New York.

The Dow Jones industrial average <.DJI> was up 2.91 points, or 0.03 percent, at 11,557.94. The Standard & Poor's 500 Index <.SPX> was down 0.68 points, or 0.05 percent, at 1,256.86. The Nasdaq Composite Index <.IXIC> was down 7.87 points, or 0.30 percent, at 2,659.40.

Trading volumes, already light over the holiday season, were expected to remain thin as the eastern United States dug out from a blizzard that stranded thousands of travelers at the end of the busy Christmas weekend.

The blizzard pushed oil prices near a 26-month high in the previous session. February U.S. crude futures were up 38 cents at $91.38 a barrel.

Anadarko Petroleum Corp gained 1 percent to $69.45 and Chesapeake Energy Corp rose 1.1 percent to $25.84. Chevron Corp added 1.1 percent to $91.09.

In a sign the December equities rally may have some steam left going into the new year, a recent report showed hedge fund managers have turned extremely upbeat on U.S. equities. The TrimTabs/BarclayHedge Survey of Hedge Fund Managers showed about 46 percent of 92 managers surveyed in the past week were bullish on the S&P 500, while only 19 percent were bearish.

These bullish and bearish readings are the highest and lowest, respectively, since the inception of our survey in May, said Sol Waksman, founder and president of BarclayHedge.

The options market seemed more cautious about equities. Larry McMillan, president of McMillan Analysis Corp, said all the major technical indicators had buy signals and several were overbought.

At this point, a sharp but short-lived correction is possible, but as long as it holds above S&P 500 support at 1,220, there shouldn't be any real problems for the bulls, McMillan said.

The CBOE Volatility Index <.VIX> rose for the second straight session. Generally, if the VIX rises for three days in a row in the face of a flat or rising stock market, it is a bearish indicator.

In corporate news, General Motors Co was up 2.6 percent to $35.48 after several analysts initiated coverage, including overweight ratings from Barclays Capital and Morgan Stanley.

MannKind Corp jumped 3.1 percent to $8.22 after the company said U.S. regulators need an additional four weeks to complete a review of its experimental diabetes treatment. The news lifted the hopes of investors who had expected the drug to be rejected outright.

(Reporting by Angela Moon; additional reporting by Doris Frankel; editing by Jeffrey Benkoe)

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