Reports Underscore Economic Strength

Orders to U.S. factories increased 2.5 percent in January, led by communication equipment and electronic components, the Commerce Department said Thursday.

In a separate report, the nation’s largest retailers reported modest sales gains for February.

January’s increase in factory orders was the first increase in three months and the biggest gain in four months. December factory orders fell a revised 1.5 percent.

Excluding the volatile transportation sector, orders in January were up 2.5 percent, their biggest gain in nine months. Orders excluding transportation decreased a revised 1.6 percent in December.

Analysts credited clearance racks, new spring merchandise and mild weather for February’s higher retail sales.

Some top performers included: J.C. Penney, which in recent months has seen a turnaround in its sales; Wal-Mart, thanks to continued success of its supercenters; and Saks Fifth Avenue, a leader of tony retailers.