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The Honolulu Advertiser

Posted on: Friday, February 27, 2004

Drop in factory orders puts pressure on Dow

By Meg Richards
Associated Press

NEW YORK — Wall Street stumbled through a mostly lifeless session yesterday as bargain hunters gave technology stocks a moderate lift but struggling defense contractors kept blue chips under pressure.

A Commerce Department report that orders for big-ticket items from the nation's factories fell by 1.8 percent in January limited investors' enthusiasm, but analysts were not concerned that this presaged a steeper decline.

Although the major indexes have registered losses in five of the past six sessions, the market has shown great resiliency, said Stephen Carl, principal and head of equity trading at The Williams Capital Group.

"I don't think the numbers are so out of whack. But it's giving more cause to take some profits," Carl said. "We've had a fine run-up, we're not seeing crazy swings, so (the market's) handling everything well."

The drop in orders for durable goods — costly manufactured products expected to last at least three years — was largely because of a plunge in demand for commercial and military aircraft. Economists had forecast a 1.4 percent rise.

Investors found the news disheartening after a better-than-expected 1.6 percent advance in December. But some economists suggested the report overstated the declines: Excluding orders for transportation equipment like planes and cars, orders for other durable goods rose by a solid 2 percent.

Separately, the Labor Department said new claims for unemployment benefits last week rose by 6,000 to 350,000, highlighting the uneven recovery taking place in the jobs market.

Advancing issues outnumbered decliners more than 3 to 2 on the New York Stock Exchange. Consolidated volume was moderate, with 1.79 billion shares traded, compared with 1.75 billion shares on Wednesday.