* Telecom shares rise on analyst upgrades
* Consumer spending up more than expected in February
* Japan plant radiation, Libya violence add to volatility
* Indexes up: Dow 0.17 pct, S&P 0.14, Nasdaq up 0.08 pct (Updates to midday, changes byline)
By Chuck Mikolajczak
NEW YORK, March 28 (Reuters) - U.S. stocks advanced on Monday, boosted by strength in telecommunications and an eighth straight monthly rise in consumer spending, but jitters about overseas concerns limited gains.
Japan's nuclear disaster and civil unrest in the Middle East and North Africa have increased market volatility in recent weeks, making investors cautious as they watch headlines closely for trading cues.
"It puts a cap on things for right now, at least until we start to see some earnings come out early in April. That might finally give us a little more upside, assuming that we have good earnings," said Janna Sampson, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
"At some point people have got to price in Japan's problems and the problems in the Middle East that we know about."
U.S. consumer spending rose slightly more than forecast in February, while inflation accelerated at its fastest pace since June 2009.
The S&P telecom sector rose 1.5 percent after Robert W. Baird upgraded a number of companies, including Dow components AT&T Inc and Verizon Communications Inc, saying after AT&T's deal to buy T-Mobile USA was completed, both AT&T and Verizon should benefit from one less competitor.
AT&T rose 2 percent to $29.44 while Verizon was up 1.4 percent to $37.80.
Pending U.S. home sales unexpectedly rose last month, gaining 2.1 percent and breaking a recent trend of negative data on the sector. Stocks showed little impact from the data.
The Dow Jones industrial average gained 20.58 points, or 0.17 percent, to 12,241.17. The Standard & Poor's 500 Index added 1.86 points, or 0.14 percent, to 1,315.66. The Nasdaq Composite Index rose 2.09 points, or 0.08 percent, to 2,745.15.
Eastman Kodak Co, up 11.5 percent to $3.79, was the second-most active stock on the New York Stock Exchange after a U.S. trade panel in the United States last week agreed to review a case that could bring the struggling photography company hundreds of millions of dollars in royalties.
The case stems from a patent claim against Apple Inc and Research in Motion Ltd . Apple shares edged up 0.3 percent to $352.50 and U.S.-listed shares of Research in Motion shed 1.2 percent to $56.20.
Highly radioactive water leaked from a crippled nuclear complex in Japan, renewing worries over the country's reactors after an earthquake and tsunami.
Violence spread in Libya as rebels 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. (Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)