S&P faces 1,100, searches for catalyst

By Leah Schnurr

NEW YORK (Reuters) - U.S. stocks could face difficulty gaining traction next week as the S&P 500 bumps against the 1,100 mark and investors become content to cool their heels rather than risk losing gains made for the year.

With the vast majority of corporate results already reported, market watchers are casting around for the next catalyst to drive stocks. That will put next week's round of economic data in the spotlight, including retail sales, the Consumer Price Index and housing starts.

The equity market's 60 percent rise from 12-year lows hit in March reflects optimism for improved demand in coming months.

But the path out of the recession is a bumpy one.

Investors are trying to strike a balance between improved corporate outlooks and the consumer's slow recovery due to a weak labor market.

"We've seen a pullback in buying, but there's not really any conviction from the sellers either," said Jeff Kleintop, chief market strategist at LPL Financial in Boston. "I think we're in no man's land here."

After beginning the year at around 900, the S&P 500 faces major resistance at the 1,100 barrier. The broad index has been unable to close above that mark this year, despite four intraday attempts. But a decisive close above the psychologically important level could be seen as a buy signal.

"This area was resistance last month and was trouble again"