Stock futures signaled a higher open Wednesday after Wall Street got another sign that its doomsday forecast for the economy might have been overdone.
The government reported that demand for big-ticket manufactured goods rose in February rather than fell as economists had predicted. Data on durable goods orders can be fickle but the surprise increase is still welcome news for an economy that until weeks ago seemed only capable of producing worsening stats.
Orders at U.S. factories for cars, airplanes, household appliances, furniture and other large goods rose 3.4 percent last month, rather than fell 2 percent as forecast. The increase was the biggest in 14 months and breaks a streak of six straight monthly drops. However, a large drop in orders in January was revised even lower.
It will take months of improving data before analysts can safely assert that the economy is on the mend. But many traders are simply anxious for any signs that the economy is at least halting its slide.
Economists’ expectations have been so grim lately that recent reports on retail sales, housing starts and inflation have helped propel a two-week rally in stocks after the numbers weren’t as bad as feared.
Stock futures pointed moderately higher after the report and following a drop in the market Tuesday. That pullback followed a huge rally Monday that came as the government outlined a plan to help banks dispose of bad assets.
Traders will be looking for any further signs that they might have been too pessimistic. The government is expected to release a report after the opening bell showing that sales of new homes fell 2.9 percent last month to a record low. Wall Street expects new home sales fell in February to a seasonally adjusted annual rate of 300,000 units from 309,000 units a month earlier.
Stock futures contracts strengthened after the report on durable goods. Dow Jones industrial average futures rose 44, or 0.6 percent, to 7,664. Standard & Poor’s 500 index futures rose 2.00, or 0.3 percent, to 805.40, while Nasdaq 100 index futures rose 5.75, or 0.5 percent, to 1,242.00.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.73 percent from 2.71 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.20 percent from 0.17 percent Tuesday.
The dollar was mixed against other major currencies, while gold prices fell.
Oil prices fell $1.29 to $52.69 in electronic trading on the New York Mercantile Exchange.
Copyright 2009 The Associated Press