US factory orders fall for second straight month
Orders to US factories fell for the second straight month in May, a potentially worrisome sign for American industry. The Commerce Departments reported yesterday that factory orders declined 0.8 percent in May, the biggest drop since last November. They fell 0.3 percent in April. Economists had expected factory orders to drop again in May - but the fall was twice what they’d forecast. Excluding the volatile transportation sector, factory orders fell 0.3 percent in May. Orders for civilian aircraft plunged 11.6 percent after dropping 12.2 percent in April. Computer orders slid 2.1 percent
Orders rose a modest 0.2 percent in a category - capital goods excluding aircraft and military equipment that is closely monitored for signs of businesses’ investment plans. American manufacturing has been sending mixed signals. The Federal Reserve reported last month that factory fell 0.4 in May, reversing a sharp increase in April. The Institute for Supply Management reported Monday that its manufacturing index rose last month to the highest level since August 2014.
US factories have rebounded from a slump in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar that made American products costlier overseas. But overall economic growth has been lackluster. The US economy expanded at a 1.4 percent annual pace from January through March. Consumer spending on longlasting durable goods dropped at a 1.6 percent annual pace in the first quarter, the weakest showing since the second quarter of 2011.
Elsewhere Petroleum-linked shares tumbled early yesterday, on lower oil prices, pressuring US stocks, while some big technology shares were modestly positive. ExxonMobil and Chevron were among the biggest losers in the Dow as oil prices slid on worries about higher output from members of the Organization of the Petroleum Exporting Countries.
But large technology companies including Apple, Amazon and Microsoft advanced modestly. Tech shares have been volatile for the last several weeks, with some analysts describing a rotation to disfavored sectors from after the Nasdaq surged to a series of records this spring. About 20 minutes into trading, the Dow Jones Industrial Average was down 0.2 percent at 21,441.82.
The broad-based S&P 500 lost 0.1 percent at 2,425.92, while the techrich Nasdaq Composite Index was flat at 6,111.05. US markets were closed Tuesday for the Independence Day holiday. Key events this week include the release of Federal Reserve meeting minutes, which are expected to shed light on the US central bank’s thinking on raising interest rates further and Friday’s release of the June employment report, expected to show an addition of 173,000 jobs. —AP
CANTON: In this April 6, 2016, photograph, a technician uses a lift to move a back seat section into a new Altima on the assembly line at the Nissan Canton Vehicle Assembly Plant. —AP