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U.S. factory orders fall
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April 3, 2001: 10:51 a.m. ET
February off 0.4% versus forecast of a rise; January revised down
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NEW YORK (CNNfn) - Orders received by U.S. factories fell in February, the government said Tuesday, led by declines in industrial machinery and transportation equipment. The drop was a sharp contrast to Wall Street forecasts for a small rise.
Factory orders fell 0.4 percent to a seasonally adjusted $362.9 billion after tumbling a revised 4.3 percent in January, the Commerce Department said. Excluding the volatile transportation sector, orders dipped 0.3 percent.
Wall Street economists had forecast a 0.2 percent increase for February. January orders were revised down from the 3.8 percent drop originally reported, the agency said.
Shipments dropped 0.5 percent in February, the sixth consecutive decline.
The report follows Monday's data showing that U.S. manufacturing shrank for the eighth straight month in March, though activity edged up a bit from the month before.
The economic slowdown has hit the manufacturing sector hardest, causing companies to sharply cut production, trim jobs and reduce work hours to cope with flagging demand
The Federal Reserve has cut interest rates three times so far this year in a bid to keep the slowing U.S. economy from slipping into recession. Lowering interest rates typically leads banks to offer lower borrowing costs, which Fed officials hope will encourage consumers to spend more.
Consumer spending is key since it accounts for two-thirds of the nation's economy.
Wall Street traded lower after the report, hurt mostly by fresh worries about earnings.
Industrial machinery and transportation equipment led the declines, in both orders and shipments, but shipments of electronic equipment increased during the month.
Inventories of durable goods decreased 0.2 percent to $182.9 billion, the first decrease since March 2000. Meanwhile, inventories of non-durable goods fell 0.3 percent to $182.9 billion.
-- from staff and wire reports 
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