Investing.com - U.S. stocks closed modestly higher Thursday, following a day struggling for direction, as U.S.-China trade war tensions continued to weigh on sentiment after Beijing accused Washington of "naked economic terrorism."
With just a day to go until month end, stocks swung between gains and losses as traders continued to digest the latest headlines on trade amid increasing expectations for a prolonged U.S.-China trade war.
"We oppose a trade war but are not afraid of a trade war,” Chinese Vice Foreign Minister Zhang Hanhui said Thursday in Beijing when asked about the tensions with the United States. "This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying."
Energy stocks, which have been under pressure from escalating trade tensions, fell more than 1% as oil prices slumped following a smaller-than-expected draw in domestic crude stockpiles.
But there were some corners of the market that offered hope, with consumer discretionaries climbing, led by a rally in retailers, including Dollar General and Dollar Tree.
Discount retailer Dollar General (NYSE:DG) surged 7% on the back of first-quarter results that crushed estimates from Investing.com on both the top and bottom lines. Dollar General's same-store sales of 3.8% also topped expectations for a 2.9% rise.
In financials, banking stocks fell as Treasury yields continued to stutter amid mixed economic data. Expectations for a decline in trading revenues also hurt banks.
Bank of America indicated trading revenue would likely be 10% lower for the quarter, while Citigroup also warned of declining revenue.
In other company news, Tesla (NASDAQ:TSLA) fell 0.9% after Barclays cut its price target on the electric automaker's stock, warning that the company is "stalling as a niche automaker."
On the economic front, a second reading of U.S. GDP showed the economy expanded by 3.1% on an annualized basis in the first quarter, a downward revision from 3.2% estimates previously, but in line with expectations.
Following the malaise in May, in which stocks have lost about 5%, Morgan Stanley warned that markets are likely entering a slow growth cycle, suggesting equities have room to slide.
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