US September durable goods orders fall, new home sales up

As if fears of rising inflation were not enough, markets are now being hit by fears of a slowing economy.

U.S. stocks dropped on Thursday for a third straight day on a bigger-than-expected decline in durable goods orders... The Dow Jones industrial average fell 115.03 points, or 1.11 percent, to end at 10,229.95. The Standard & Poor's 500 Index dropped 12.48 points, or 1.05 percent, to finish at 1,178.90. The technology-laced Nasdaq Composite Index slid 36.24 points, or 1.73 percent, to close at 2,063.81.

Reuters reports the fall in durable goods orders.

New orders for U.S.-made durable goods sank an unexpectedly deep 2.1 percent last month as aircraft orders plunged, but even non-transportation orders dropped 1 percent, a government report showed on Thursday...

The report also showed a 1.2 percent decline in orders for non-defense capital goods, excluding aircraft, which economists look to as a proxy for future business spending.

The drop in demand for long-lasting manufactured goods was likely to renew concerns that soaring energy prices could be weighing on the economy. Upward revisions to August orders, however, could temper those concerns.

In other economic news, Reuters reports that new home sales were up in September, but the US housing market is also showing signs of cooling.

The Commerce Department said new single-family home sales rose 2.1 percent last month to a seasonally adjusted annual rate of 1.222 million units from 1.197 million unit pace in August -- a sharp downward revision. New home sales were revised lower for June and July as well.

The September sales pace was 0.1 percent slower than a year ago...

While sales rose, the supply of homes available for sale shot up to a record 493,000 at the end of September, surpassing August's high of 478,000. At September's sales pace, that represented a 4.9 months' supply.

The median home sales price fell 5.7 percent to $215,700.

The weak economic data caused US Treasury yields to fall yesterday, but the stock market obviously took no comfort from that, a contrast to the kind of reaction that we got at the height of the bull market, and an indication of how jittery stock investors have become.