NEW YORK: A resurgent Wall Street will keep a close eye on the state of the US consumer in the coming week for signs of a stronger economic recovery heading into the year-end holidays.

With a critical report on US retail sales looming, the stock market has rallied over the past two weeks to near the highs of 2009, but may need a new spark to extend its gains, say analysts.

The Dow Jones Industrial Average galloped higher by 2.46 percent to 10,270.47, in a second consecutive strong week for Wall Street and just off 13-month highs hit Wednesday.

The technology-heavy Nasdaq composite climbed 2.62 percent on the week to 2,167.88 and the broad-market Standard & Poor's 500 index rose 2.26 percent to 1,093.48.

One critical element for the market will be Monday's report on US retail sales, expected to show a 0.9-percent rise for October after a slide of 1.5 percent in September.

"Retail trade looks to have bounced back from September's dip, but the most important months of the year still lie ahead, and both employment and confidence survey trends point to a tame holiday shopping season," said Avery Shenfeld at CIBC World Markets.

Over the past week, the market drew strength from positive news from the US retail sector, including strong earnings from sector leader Wal-Mart and upbeat guidance from others such as JC Penney.

Yet analysts say consumers will have to emerge from their retrenchment, especially in the critically important holiday shopping season, to fuel the economic recovery.

"We've had our end-of-recession relief rally... now we're in a wait-and-see mode to see how strong the recovery is going to be," said Gina Martin at Wells Fargo Securities.

Pascal Gauthier, economist at TD Bank Financial Group, agreed that consumer spending, the largest single component of US gross domestic product, "remains king."

"We do not expect consumer spending to lead the recovery, but it remains a necessary and key ingredient of the recipe," he said.

Gauthier said he looks for consumer spending growth "to be coincident with the overall recovery," while "other ingredients of the economic reprise, such as exports and residential investment, will lead the way."

David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, said some may be disappointed by the US consumer, and some much of the spending has been fueled by special incentives such as the government's "cash for clunkers" auto program.

"US consumer shopping habits have changed on a semi-permanent basis," he said.

"Yes, the government can step in time and again to distort human nature and try to reverse the rising trend in the personal savings rate, but left to their own devices, households are in a thrifty state."

He said one survey showed that more than 25 percent of consumers polled "say they have permanently altered their shopping patterns in view of the asset and credit collapse this cycle."

Fred Dickson at DA Davidson said he is seeing some cracks in the rally fueled by a weaker dollar, which has led to borrowing to fuel investments in commodities, bonds and stocks.

"The S&P 500 is struggling to move above 1,100," he said

"We do expect to see periods where the dollar strengthens, causing pullbacks in the global equity markets and the commodity markets," he said.

"We do not expect the current dollar rally to last very long and when the dollar resumes its slide, we expect to see the stock and commodities markets react resuming their upward price movement."

Bonds fell on the week. The yield on the 10-year Treasury bond increased to 3.503 percent from 3.392 percent a week earlier and that on the 30-year bond rose to 4.394 percent against 4.236 percent. Bond yields and prices move in opposite directions.

In the coming week, the market also will react to reports on US inflation, housing starts and industrial production.