Stocks on hold, with oil a hurdle

By Jennifer Coogan

NEW YORK (Reuters) - Stocks are within spitting distance of crossing a milestone this week that could propel the market out of its trading range, but surging oil prices and economic uncertainty pose major obstacles.

So far this month, stocks have managed to hang on to the gains made during the April recovery as the first-quarter earnings season passed without many shocking disappointments, despite the credit crisis and slackening economy.

All three major indexes came close last week to topping their 200-day moving averages, a level that would signal positive momentum.

"That's the yardstick people use to measure the big-picture trend. They put a lot of importance on that in the equity market," said Bill Strazzullo, chief market strategist at Bell Curve Trading in Boston.

But as the earnings season winds down, the market will have to take more of its cues from economic indicators such as retail sales and CPI, and other assets such as currencies and commodities, rather than corporate profits.

Investors may be more inclined to book tidy profits earned since the March lows, than wait and see how the data pans out.

"What people are realizing is that we've had a great run and they'll get out of positions they're not comfortable with. There's been a fair amount of skepticism about the rally," Strazzullo said. "The volume on the upside wasn't the greatest, which tells you a lot of people never bought into the fact that things are appreciably better."

RUNAWAY OIL PRICES AND CPI