U.S. stocks closed slightly higher on Thursday

U.S. stocks closed slightly higher on Thursday, extending the prior day's rebound, as negative news out of Greece counterbalanced a good retail sales report. (Tweet This)

In mid-morning trade the International Monetary Fund spokesman said there were "major differences" with Greece on aid negotiations and that the IMF team has left Brussels, where the talks were held, Reuters said.
The news pressured stocks, with the Dow Jones industrial average closing about 40 points higher, off earlier gains of 100 points. The Nasdaq Composite also briefly fell into negative territory in midday trade. The major indices opened higher on signs consumer spending was picking up and hopes that Athens was close to a resolution with its creditors.
"I do think the Greece situation just continues to be a little of a headwind," said Ben Pace, chief investment officer at HPM Partners.

European stocks pared gains from earlier hopes of a Greece deal, with the DAX closing 0.6 percent higher after earlier rising 1.5 percent. The ATHEX Composite ended 8.16 percent higher. European officials said there was a "good chance" of a deal ahead of the euro group meeting next week.
Greece's Prime Minister, Alexis Tsipras, and European Commission President Jean-Claude Juncker ended talks on the debt negotiations without coming to a resolution. A European Union diplomat told Reuters the discussion was a "last attempt" to reach a deal, while Dow Jones reported that Juncker said in a statement that he held an "important, friendly and constructive meeting" with Tsipras.

Analysts remained optimistic that Greece would come to a deal with its creditors.
"We used a lot of the internal energy in yesterday's moonshot," said Jeffrey Saut, chief investment strategist at Raymond James. "I think Greece is not impactful. ... I think there's going to be a solution on Greece. They're not going to pull out."

U.S. stocks bounced on Wednesday, closing more than 1 percent higher amid some encouraging signs on talks between Greece and its creditors on a cash-for-reform deal.

Transports continued to recover on Thursday, rising 1 percent, with railroads leading the way higher as CSX shot up 3 percent.
"I think in general (retail sales was) spot on and it will keep the rally going," said Marc Chaikin, CEO of Chaikin Analytics. "I think we're going to break out to new highs."
Retail sales for May showed an increase of 1.2 percent, with the ex-autos figure up 1 percent. April retail sales were revised upward to 0.2 percent from flat.

"The revision for the previous flat month, up 0.2 percent, makes it slightly more positive than previously thought," said Peter Cardillo, chief market economist at Rockwell Global Capital.
Economists polled by Reuters forecast retail sales rose 1.1 percent month-on-month and 0.7 percent excluding autos.

"With three positive retail sales numbers, the trend is starting to improve," said Robin Anderson, senior economist at Principal Global Investors.

Weekly jobless claims totaled 279,000, slightly above expectations. April business inventories showed an increase of 0.4 percent, the largest gain in nearly a year. Retail inventories excluding autos, which go into the calculation of GDP, rose a solid 0.6 percent in April.

The Atlanta Fed raised its GDPNow model forecast for real GDP growth in the second quarter to 1.9 percent from last Wednesday's 1.1 percent estimate.
Treasury yields extended losses after earlier trading just below recent multi-month highs, with the 10-year yield falling about 10 basis points to trade below 2.40 percent. The German 10-year bund yield fell below 0.9 percent after crossing 1 percent on Wednesday for the first time since September.
The 30-year bond yield traded near 3.10 percent after a $13 billion auction at a high yield of 3.138 percent.

"I think that part of that (pullback in yields) is due to some of the news that came out of Greece," said Kevin Mahn, chief investment officer at Hennion & Walsh Asset Management.

Shorter-term yields traded flat, with the 2-year note yield at 0.73 percent.

"The front end remains focused on strong data which puts a September rate move by the Fed on track," said Brandon Swensen, co-head of the fixed-income desk at RBC Global Asset Management. "In this environment, volatility will remain a dominant theme in our view."

The U.S. dollar extended gains against the euro, which held near $1.12.

Investors also looked ahead to next week's U.S. Federal Reserve meeting, which is not expected to change the consensus view for a September rate hike.
The dollar has been rising for nearly a year but lost 1.3 percent against the yen on Wednesday as investors unwound short yen positions following a comment by Bank of Japan Haruhiko Kuroda that the yen was already "very weak."

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Japanese government and central bank officials said Kuroda's remark was not part of a concerted effort by Tokyo to check the currency's declines.

The dollar last traded at 123.41 yen, up 0.6 percent on the day, and it was ahead 0.60 percent against the euro to $1.1260. The dollar index was up 0.4 percent.

The dollar was also helped by a selloff in the New Zealand dollar, which slumped 3 percent to a five-year low against the greenback after the Reserve Bank of New Zealand cut rates and suggested more easing may follow.

The kiwi was last off 2.8 percent at $0.7002 in New York trade.

Trading volumes were light, according to David Bradley, director of currencies trading at Scotia Bank in Toronto.