Factory Orders Post Modest Rise

Factory orders continued to grow moderately in September, rising 0.4 percent, the Commerce Department said Wednesday.

Defense orders, which surged 41.8 percent, offset a 4.9 percent decline in transportation goods orders. Excluding defense goods, orders fell 0.2 percent.

The increase matched Wall Street's expectations. Much of the data in the report was released a week ago in preliminary form in the durable goods order report. Wednesday's report revises the previously reported 0.9 percent increase in durable goods orders to 0.8 percent, gives more details on durable goods and adds data on nondurables.

The report shows patches of weakness in manufacturing, which has been the sector hardest hit by the global economic crisis and the resulting inventory buildup. Two sectors keyed to business investment - industrial machinery and electronics - gained strength in September.

Orders for durable goods rose 0.8 percent while orders for nondurables fell 0.1 percent.

Within durables, orders for industrial machinery rose 4.6 percent on another big increase in orders for engines and turbines, which are up 129 percent from a year ago. Other machinery, including computers, fell modestly.

Order for electronics jumped 5.5 percent, erasing a 5.2 percent loss in August. The big gainer was communications equipment, which rose 19.5 percent.

Orders for transportation equipment fell 4.9 percent as aircraft orders plunged 31.3 percent. However, orders for ships and tanks skyrocketed 303.3 percent as defense orders rolled in.

Orders for fabricated metal products gained 1.1 percent while orders for primary metals slipped 2.5 percent. Metals have been under particular pressure from Asia and are down 19.3 percent in the past year.

Written By Rex Nutting, CBS MarketWatch