New York -Wall Street stocks finished a volatile day sharply lower on Friday as strong US retail sales data rekindled talk that the Federal Reserve could more quickly lift interest rates.
But European stocks posted solid gains following good German growth data as investors brushed off a warning from the IMF on a potential British exit from the European Union.
US consumers came back to stores in April, spending more than expected to reverse a worrisome stall in the first quarter of the year, Commerce Department data showed.
Retail sales, including food services, jumped 1.3% from March, to $453.4bn, and were up 3.0% from a year ago. Analysts had expected a 0.8% rebound from March.
But the downside of the better data was the somewhat higher possibility that the Federal Reserve could lift interest rates in June, said Chris Low, chief economist at FTN Financial.
"We have to consider at least the possibility" of a rate hike next month, he said, adding that such an outcome is still highly unlikely.
The S&P 500 finished the day down 0.9%.
Frankfurt stocks won 0.9% as data showed that the German economy grew by a better-than-expected 0.7% in the first quarter of this year.
Paris advanced by 0.6% in value, aided also by separate figures showing the 19-member eurozone economy grew 0.5% in the same period.
London also managed a gain of 0.6% despite poor British construction data and after the International Monetary Fund warned again of "significant downside risks" if British voters approve a EU exit in a June 23 referendum.
IMF chief Christine Lagarde, unveiling the global lender's latest health check on the British economy just six weeks before the referendum, added that Brexit could push the country into recession.
The dollar climbed 0.6% on the euro and the pound as the strong US retail sales data also reverberated through the foreign exchange market, raising speculation about a rate hike this year from the Fed's policy arm, the Federal Open Market Committee.
"This data is not enough to convince the FOMC of a faster pace of real GDP growth this quarter," said PNC Bank chief economist Stuart Hoffman.
Nevertheless, he said, in the June FOMC meeting it will be used by the hawks among the policymakers to try to pull the Fed off the dovish rate stance it has held in recent meetings.
Oil prices fell, with analysts saying traders booked profits from the previous day's strong rally ahead of the weekend amid general hope that the oversupply is easing.