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Factory orders up 0.3% in February

But rise sends markets lower

WASHINGTON -- America's factories saw orders bounce back a bit in February, a sign that manufacturing is continuing to emerge from a three-year slump.

The Commerce Department reported yesterday that orders placed with factories increased by a modest 0.3 percent last month, compared with a drop of 0.9 percent in January.

Although February's rebound wasn't as strong as the 1.5 percent increase economists were forecasting, it was still encouraging that factory orders managed to recover some ground last month.

On Wall Street, though, the factory orders report helped pull stocks lower. The Dow Jones industrials closed down 24 points at 10,357.70, while the Nasdaq Composite index declined 6.41 to 1,994.22. The Standard & Poor's 500 lost 0.79 to finish at 1,126.21.

Demand for ''durable" goods -- costly manufactured products, including automobiles, household appliances and computers -- rose by 2.5 percent in February.

That was an improvement from the 2.6 percent decline registered in January and marked the biggest increase since October.

But ''nondurable" goods, such as food and clothing, fell by 2 percent in February, compared with a 1.2 percent increase in January. The weakness in nondurables in February was broadbased, restraining overall factory orders for the month.

Even though a number of other economic reports show manufacturing improving, many plants continue to operate below capacity and jobs continue to evaporate. Manufacturers in February cut jobs for the 43rd month in a row.

Hardest hit by the 2001 recession, manufacturers over the past three years have had to cope with difficult economic times at home and abroad and compete against a flood of imports flowing into the United States.

Economists believe the economy is growing at a healthy annual rate of 4.5 percent in the current January-to-March quarter.

Some economists hope that companies, which have seen profits improve, will hire more workers in the coming months. A sustained turnaround in the sluggish jobs market is the one missing chapter in the economic recovery story, economists say.

Separately, the Labor Department's Bureau of Labor Statistics said yesterday it will release a report on wholesale prices for February this morning.

The report, originally scheduled to be released on March 12, had been delayed because of difficulty converting current categories to a new system.

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