Stocks Struggle After Sentiment Boost

Stocks struggled to hold onto gains Friday after getting a boost from a better-than-expected reading on consumer sentiment.

Stocks had started the day lower after the government's reading on retail sales fell short of Wall Street's expectations.

The Dow Jones Industrial Average was off about 50 points, after gaining 273.28, or 2.8 percent in the prior session.

Consumer sentiment jumped to 75.5in a mid-June reading, the highest since January 2008, according to the latest University of Michigan and Reuters survey. That's up from 73.6 at the end of May abnd better than the 74.5 expected.

The retail sector rebounded after the consumer sentiment reading.

Earlier, government report showed retail sales fell 1.2 percent in May despite projections that they would increase 0.2 percent. It was the largest decline in eight months as consumers slashed spending on everything from cars to clothing. Building materials saw one of the biggest declines, falling 9.3 percent.

And business inventories rose 0.4 percent in April; economists had expected a 0.5-percent gain.

Elsewhere, BP continued to rebound after gaining more than 12 percent in the previous session. There's a rising backlash from the UK over the US's tough talk with the company which has slashed the company's market cap in half. An estimated 10 percent of pensions in the UK include the oil giant's stock.

The head of investment banking at JPMorgan Chase said the company's second-quarter earnings performance could be affected by a reduction in client risk appetites.

Separately, JPMorgan and Morgan Stanley are expected to win the lead undewriting role for the GM IPO, the Wall Street Journal reported.

Dell has set aside $100 million for a potential settlement with the Securities and Exchange Commission, which has been probing the company's accounting practices and relationship with chipmaker Intel .

Elsewhere in tech land, Research In Motion and Motorola have settled a patent dispute over mobil technology.

Dow component Caterpillar and Navistar are working out a $586 million truck and engine manufacturing deal with China's Anhui Jianghuai Automobile, a source told Reuters.

European shares rose on Friday, lifted by BP stock, in a 180-degree pivot of its spectacular downward trend since the oil spill in April.

British Prime Minister David Cameron offered to help deal with BP Gulf of Mexico oil spill, saying he would take it up with U.S. President Barack Obama, as the company's shares rebounded from 14-year lows. On Thursday, UK industry expressed alarm yesterday at the “inappropriate” and increasingly aggressive rhetoric being deployed against BP from the US government.

Asian stocks surged on Friday, led by Tokyo, tracking Wall Street's rally overnight which saw all three major indices gaining nearly 3 percent. The Nikkei climbed 1.7 percent, moving closer towards a key resistance level, on signs of health in the euro debt market and a halt in the yen's advance against the euro.

On Thursday, U.S. stocks rallied as economic data from the U.S. and China, along with comments from Europe, helped momentum.

Japan's new prime minister startled markets with statements that his country could face a financial mess like Greece has experienced if its debt problems are not addressed.

Japan is on firmer financial footing than Greece because most of its debt is held domestically and Kan's statements appeared designed to push forward his agenda, which may involve raising taxes.

Still to Come:

FRIDAY: Fed's Plosser and Kockerlakota speak; consumer sentiment; business inventories; S&P index rebalancing details announced