If bulls have their way, U.S. 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 along with disappointing outlooks from major retailers could spoil the party.

U.S. gasoline prices may climb to $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 gas tanks.

Apparel retailer Gap Inc. and Target Corp. 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 lackluster 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 T. 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 its record close. The blue-chip Dow average ended at another record, after hitting a lifetime intraday high at 13,558.48.

For the S&P 500, this is the longest streak of gains since a 9-week run-up that started in late November 2003.

For the week, the Dow gained 1.7 percent and the S&P 500 advanced 1.1 percent. But the Nasdaq Composite Index slipped 0.2 percent.

Most of the stock market's gains have been fueled by a surge in takeovers, including a $3.67 billion buyout of eye-care company Bausch & Lomb Inc . On Friday, sources said General Electric could sell its plastics division for almost $11 billion.

For the year, the Dow is up 8.8 percent so far, while the S&P 500 is up 7.4 percent and the Nasdaq is up 5.9 percent.

A Premium on Pocketbook Issues

Economic data could inject some volatility into the market, as investors comb through new releases for clues about the outlook for interest rates.

The economic agenda includes the Richmond Federal Reserve Bank's manufacturing index on Tuesday, initial jobless claims, durable goods orders and new home sales on Thursday, followed by existing home sales on Friday.

"The most important thing for people to focus on is initial jobless claims because the case for a materially slower economy rests on a further slowing in consumer spending," said Larry Smith, chief investment officer of Third Wave Global Investors in Greenwich, Connecticut.

In order to really rattle the consumer, "you have to start with income and job security — and both of those are looking pretty good," Smith said.

Initial claims of around 300,000 — which would put the four-week moving average below 300,000 — would likely lead to more hawkish Federal Reserve comments, which could spook a lot of equity investors, Smith said.

Initial jobless claims data is expected to have risen to 305,000 from 293,000 the previous week.

Orders for durable goods — costly and long-lasting manufactured items such as washers, dryers and refrigerators — are expected to rise 1 percent in April, below the 3.7 percent gain in March.

Consumers could also feel the pinch at the pump due to surging gasoline prices, as the summer driving season starts in earnest on Memorial Day weekend. In London, Brent crude settled at $69.59 a barrel. In New York, U.S. crude for June delivery settled at $64.94 a barrel.

No Place Like Home

Earnings from home improvement retailer Lowe's Companies Inc., due Monday, will be scrutinized for more clues about the state of the U.S. housing market. Rival Home Depot this recently posted a profit that missed estimates.

New home sales for April, expected on Thursday, are forecast to edge up to an annualized rate of 0.860 million units from 0.858 million in March, according to economists polled by Reuters.

Existing home sales for April, due on Friday, are expected to fall to an annualized rate of 6.11 million units from 6.12 million the previous month.

Concerns about a spillover from the weakening housing market were eased last week after Federal Reserve Chairman Ben Bernanke said that a rash of U.S. mortgage delinquencies was not expected to hurt the broader economy.