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Stocks End Slightly Higher Amid U.S.-China Tension, Dismal Data and Higher Oil Prices

Stocks end slightly higher as tensions between Washington and Beijing flare and retail sales in the U.S. dropped a record 16.4% in April.

Stocks finished slightly higher Friday as tensions between Washington and Beijing flared and retail sales in the U.S. fell a record 16.4% in April as shoppers stayed home during the coronavirus pandemic.

Oil prices jumped, lifting shares of energy companies such as Occidental Petroleum  (OXY) . West Texas Intermediate crude oil settled up 6.8% to $29.43 a barrel.

The Dow Jones Industrial Average finished up 60 points, or 0.25%, to 23,685 - at its low for the session the Dow was down 271 points. The S&P 500 rose 0.39% and the Nasdaq rose 0.79%.

For the week the Dow and S&P 500 were both down about 2.4% while the Nasdaq slipped 1.7%. 

Boeing  (BA)  shares declined after China's state-backed English-language newspaper said Beijing could cancel its entire backlog of plane orders if trade tensions between the world's two largest economies escalate.

The warning followed a move by the U.S. Commerce Department to restrict Chinese telecom giant Huawei Technologies from using "U.S. technology and software to design and manufacture its semiconductors abroad.”

The U.S. has continued to ramp up its criticism of China's handling of the coronavirus outbreak and has encouraged companies to relocate their supply chains back to the U.S.

Worries over U.S.-China tensions were renewed on Thursday after President Donald Trump said he didn't want to talk to his Chinese counterpart, Xi Jinping, "right now." 

As for retail sales, they dropped a record 16.4% in April, almost double March's 8.7% decline, which was the steepest month-on-month drop since 1992 when record-keeping began.

Even sales at the gasoline pumps registered declines, reflected in a 16.2% drop in core retail sales, which strips out more volatile auto and gas sales.

"The destruction of retailers, both large and small, has been discussed for weeks but to see the actual impact on the sector is jaw dropping," said Mike Loewengart, managing director of investment strategy at E-Trade. 

"Loved retailers have been filing for bankruptcy amid debt concerns, furloughing workers, and shuttering stores left and right. Taken in aggregate, this paints a pretty bleak picture for earnings expectations, with major retailers like J.C. Penney,  (JCP) Nordstrom  (JWN)  and Target  (TGT) set to report next week. 

"That said, there are pockets of retail that are thriving in this stay-at-home environment and as the brick-and-mortar experience hangs in the balance, living room e-commerce is thriving," Loewengart added.

U.S. consumer sentiment improved slightly in early May, according to a survey from the University of Michigan. The preliminary reading rose to 73.7 from 71.8 in April; economists had expected sentiment to decline.

Stocks in the U.S. on Thursday staged a dramatic rebound to end higher as bank stocks rose and energy shares rallied after crude oil prices jumped nearly 10%.

The turnaround in equities came despite another 3 million Americans filing for unemployment benefits in the latest week and an increase in tensions between Washington and Beijing.