By Kate Gibson

As crude oil on Friday hit a high for the year above $74 a barrel, energy shares rallied, fueling the broader U.S. stock market toward weekly gains. But if oil continues to rise, what's been viewed as a bullish signal could turn bearish for U.S. equity investors.

"If it jumps back up to $140 (a barrel,) for the U.S. economy that is broadly negative. If it drops back to $40, it's a positive in the short term, since it's a tax break for consumers and businesses. The opposite is true when prices are going up," said Ryan Brecht, senior economist North America, Action Economics.

Asked at what price level the stock market would no longer be applauding crude's rise, Dan Greenhaus, chief economic strategist, Miller Tabak & Co. replied: "Well, last year we found out that around $100, the market took notice."

Positive U.S. and European economic data, along with weakness in the dollar, helped support oil's surge, pushed the front-month futures contract as high as $74.72 a barrel, its loftiest level so far this year, before pulling back modestly but still holding above the $74 mark. .

Crude futures have had "trouble staying above $73" and hence had been trading in a range of $65 to $73 a barrel, said Kevin Kruszenski, director of equity trading, KeyBanc Capital Markets Inc.

"So today it's a focus, since we're at a very important level," he said.

While crude's climb on Friday had it rallying to its highest point yet for the year, a barrel of oil remains roughly half of where it stood at its height last summer, when crude-oil futures on July 11 hit an intraday high of $146.65, with the Dow industrials shed 129 points that day.

"A year or so ago, higher (oil) prices were bad for the stock market, now the inverse is true. It's seen as a sign of economic recovery," Kruszenski said.

Rising energy costs would be seen in a less favorable light should the price of crude climb back over $100 a barrel, Kruszenski said. That said, it's unlikely that that would happen anytime soon, he added.

"It's too early in the economic recovery. I don't think there is enough business or consumer activity," said Kruszenski.

On Wall Street, energy shares fronted the broad market's advance to close out the week, with shares of drilling services provider Cameron International Corp. (CAM) up nearly 5%.

On the Dow Jones Industrial Average (DJI), shares of oil goliaths Chevron Corp. and Exxon Mobil both advanced nearly 2%, with the Dow lately at 9,489.71, up 139.89, or 1.5%.

As for the other major equties benchmarks, the S&P 500 Index (SPX) climbed 16.73 points, or 1.7%, to 1,024.10 and the Nasdaq Composite Index (RIXF) rose 26.8 points, or 1.4%, to 2,016.02.