WASHINGTON (AP) — Orders to U.S. factories fell in February for the second straight month, led by a drop in demand for industrial machinery and transportation products.
The 0.4 percent dip reported by the Commerce Department Tuesday left orders at a seasonally adjusted $363 billion, the lowest level since October 1999.
On Wall Street, stocks continued Monday's slide. In the first hour of trading, the Dow Jones industrial average lost 130 points and the NASDAQ index dropped 52 points.
In January, factory orders were down by 4.3 percent, according to revised figures. That was weaker than the government previously estimated.
The Federal Reserve has slashed interest rates three times this year to stave off recession. The cuts, which total 1.5 percentage points, lower borrowing costs. They are aimed at encouraging consumer and business spending, which eventually would boost economic growth.
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.
In the factory orders report, industrial equipment, including machine tools and computers, posted the biggest drop in orders of 3.1 percent. That followed a 3.7 percent increase in January.
Orders for fabricated metal products declined by 3.7 percent in February, the largest decrease since May 1997. In January, such orders fell by 1.2 percent.
Transportation equipment saw orders go down by 1.3 percent after a huge 24.2 percent plunge the previous month. These orders, which include cars, airplanes, ships and military tanks, can swing widely from month to month.
Excluding transportation equipment, overall orders to factories fell by 0.3 percent in February, the third straight monthly decline.