KEY POINTS:
If bulls have their way, US stocks will extend their streak of gains this week with another wave of takeovers expected and worries about a housing fallout diminishing.
But rocketing crude oil prices and disappointing outlooks from major retailers could spoil the party.
US petrol prices may climb to US$4 a gallon by Memorial Day, analysts have said. And if that happens, it could force consumers to curtail discretionary spending as they pay more to fill up their tanks.
Gap and Target are among major retailers due to post quarterly results this week.
They follow hot on the heels of heavyweight retailers Wal-Mart and Home Depot, which reported lacklustre earnings last week. Wal-Mart said its second-quarter earnings could miss targets.
"We will be looking for insight into what the second quarter will look like for retailers and whether there is a conscious consumer pullback," said Edward Maraccini, portfolio manager at Johnson Asset Management in Racine, Wisconsin.
"But every time the market starts to sell off, M&A activity props it back up. And if you sell stocks, where do you go? You're going to be hard-pressed to find another asset class people are going to get excited about."
The Dow Jones industrial average and the Standard & Poor's 500 index posted seven straight weeks of gains, with the S&P 500 within a whisker of a record. The blue-chip Dow ended Friday at another record, up 79.81 points to 13,556.53.
- REUTERS
