Factory orders drop in August

WASHINGTON — Orders placed with U.S. factories fell for the first time in four months, the Commerce Department said Monday, with demand dropping sharply for commercial airplanes and parts.

Factory orders declined by 0.1 percent in August, following an increase of 1.7 percent in July. August’s drop was the first since April, when orders declined by 1.1 percent.

Economists had expected an August increase of about 0.3 percent.

“Overall, the headline number is a little weaker than expected, but the report as a whole is still indicative of solid factory conditions,” said Steve Stanley, chief economist at RBS Greenwich Capital, in Greenwich, Conn.

Orders for durable goods — costly manufactured items expected to last at least three years — fell by 0.3 percent. That was better than a previous estimate of a 0.5 percent drop.

The outlook for manufacturing brightened when orders for transportation equipment were excluded from the data, with demand for non-transportation goods rising by 1.3 percent. That marked the biggest increase since March.

For nondurable goods, which includes food and clothing, orders rose by 0.2 percent.

On Wall Street, stocks were higher, with lower oil prices and a Federal Reserve forecast of economic growth ranging from 3.5 percent to 4 percent through 2005.

The Dow Jones industrial average rose 23.89, or 0.2 percent, to 10,216.54, its second straight positive session. The Dow climbed 112.38 on Friday.

Broader stock indicators were moderately higher. The Standard & Poor’s 500 index was up 3.67, or 0.3 percent, at 1,135.17, and the Nasdaq composite index gained 10.20, or 0.5 percent, to 1,952.40.