By Leah Schnurr

NEW YORK (Reuters) - If the bulls have their way, Wall Street's rally will keep going this week on signs of stability in the labor market. But concerns about penny-pinching consumers during the holiday shopping season and the specter of higher interest rates may be a hurdle to jump.

The Standard & Poor's 500 <.SPX> is up 63.5 percent from a 12-year closing low on March 9, while expectations of a significant sell-off before year's end have waned. Any dip is likely to be met with buyers eager to get into the market.

Investors are optimistic that the U.S. economy is on the path to recovery, albeit a slow one, after Friday's data showed employers cut far fewer jobs than expected in November.

Even so, worries that consumers will remain frugal during the holiday shopping season are keeping a lid on investors' enthusiasm. And after Friday's data showing the labor market picture improved in November, there's speculation that the Federal Reserve may have to raise interest rates sooner than previously expected.

Investors will watch this week's initial jobless claims report for further evidence that the job market is stabilizing, while a separate report on retail sales for November will show how stores fared during Black Friday.

"The market's going to be really focused on anything to do with consumer spending and employment data," said Scott Wren, senior equity strategist at Wells Fargo Advisors in St. Louis.

"Although I think there's not a lot of hope that we're going to see big, quick improvement in the employment numbers, certainly any surprise good news there, the market is going to like that."

Other data on tap includes a preliminary reading for December on consumer sentiment and the trade deficit for October.

Traders will also watch for any technical breakouts, with the S&P 500 facing resistance around the 1,115 level.

At Friday's close, the S&P 500 finished at 1,105.98, up 6.06 points, or 0.55 percent for the day, after earlier hitting a 15-month high at 1,119.13.

At Friday's close, the S&P 500 finished at 1,105.98, up 6.06 points, or 0.55 percent for the day, after earlier hitting a 15-month high at 1,119.13.

For the week, the Dow Jones industrial average <.DJI> added 0.8 percent, while the S&P 500 climbed 1.3 percent and the Nasdaq Composite Index <.IXIC> jumped 2.6 percent. Earlier during Friday's session, the Dow touched a 15-month high at 10,516.70 and the Nasdaq also reached a 15-month high at 2,214.39.

BOTH SIDES OF THE JOB SWORD

Government data on Friday showed the economy shed 11,000 jobs in November -- far less than the 130,000 lost jobs that analysts had forecast.