The US economic data released yesterday were negative. Reuters reports:
... [N]ationwide industrial production tumbled a bigger-than-expected 0.7 percent in April due to the most severe contraction in the manufacturing sector in nearly three years, the Federal Reserve said...
The Philadelphia Federal Reserve Bank said its business activity index was at minus 15.6 this month, improving from minus 24.9 in April...
On the labor market front, a government report showed the number of people who remained on jobless benefit rolls after drawing an initial week of aid increased 28,000 to 3.06 million in the week ended May 3...
The New York Fed's "Empire State" general business conditions index fell to minus 3.23 in May from positive 0.63 in April...
The National Association of Home Builders said its preliminary NAHB/Wells Fargo Housing Market Index fell to 19 from 20, within one point of the record low of 18 set in December 2007...
However, the data were not weak enough to disturb investors and stocks easily shrugged them off. From Bloomberg:
U.S. stocks climbed, sending the Standard & Poor's 500 Index to a four-month high, as analysts said chipmakers will benefit from rising global demand and energy shares are cheap relative to crude prices...
The S&P 500 added 14.91, or 1.1 percent, to 1,423.57. The Dow Jones Industrial Average increased 94.28, or 0.7 percent, to 12,992.66. The Nasdaq Composite Index gained 37.03, or 1.5 percent, to 2,533.73... More than five stocks rose for every two that fell on the New York Stock Exchange.
Other data out yesterday showed the eurozone economy doing well in the first quarter, but the strength may not last. Reuters reports:
... [T]he European Union's statistics office said growth for the euro zone as a whole beat forecasts, up 0.7 percent from the last quarter of 2007...
European Central Bank President Jean-Claude Trichet said the European news, while positive, merely confirmed what he had been saying for some time, namely that the first quarter would be good and the ensuing period slower...
European Statistics office Eurostat confirmed that annual inflation in the euro zone was 3.3 percent in April, below the record 3.6 percent of March but well above the ECB's goal of just below two percent...
British growth slowed in the first quarter to 0.4 percent from 0.6 percent...
Data out from Japan today also showed strong growth in the first quarter. Bloomberg reports:
Gross domestic product expanded an annualized 3.3 percent in the three months ended March 31, better than the 2.5 percent median estimate of 32 economists surveyed by Bloomberg News, the Cabinet office said today in Tokyo. Japan's fourth-quarter GDP growth was revised to 2.6 percent from 3.5 percent.
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