The Labor Department said continuing unemployment claims during the week ended May 4 declined by 4,000 to 3.009 million. The Philadelphia Federal Reserve Bank said its Business Outlook Survey for May "indicates some weakening of activity this month." The survey's broadest measure of manufacturing conditions is the diffusion index of current activity, which declined to negative 5.2 from 1.3 in April. Economists had expected the diffusion index to rise to 2.4. "The current activity index has shown no pattern of sustained growth over the past seven months, generally alternating between positive and negative readings," the Philadelphia Fed said, adding that in its most recent survey 29% of firms reported declining activity, while 24% reported increased activity. The Bureau of Labor Statistics said the consumer price index fell a bigger-than-expected 0.4% in April and that the core CPI, excluding food and energy prices, rose by 0.1%. The consensus estimate was for a 0.2% decline in the CPI and 0.2% rise in the core CPI. The Census Bureau reported that U.S. housing starts during April declined by 16.5% to a seasonally adjusted annual rate of 853,000, falling short of the consensus estimate of 973,000 among economists. Building permits, however, were up 14.3% to a seasonally adjusted annual rate of 1.017 million, which was above the expected pace of 945,000.
In a note to clients before the market opened on Thursday, Citigroup head of global equity strategy Robert Buckland wrote that "there has just been the biggest mid-cycle rerating of global equities in over 40 years. Stock prices have rallied 30% since the 2011 lows while