Orders for US durable goods went up more than the forecast in April. This was seen as an indicator that the world’s biggest economy will rebound in the second half of the year as investments strengthens. Orders for equipment meant to last for at least three years increased 3.3 percent last month after it dropped 5.9 percent in March. This was stated in the report released by the Commerce Department. The average forecast from 78 economists polled by Bloomberg was for a 1.5 percent increase.
Advances in residential construction, increasing demand for autos, and the need to upgrade equipment can help the economy recover from a slowdown this quarter. The government budget cuts as well as the fewer exports have curbed demand. These could drag the rebound of the economy.
Stocks closed higher from early losses as investors saw the prospect of improving economic growth despite their concerns with regards to the Federal Reserve policy makers’ stance on reducing the stimulus before the end of the year.
The Standard & Poor’s 500 Index dropped less than 0.1 percent to 1,649.6 at the close of trading in New York. It was down as much as 0.8 percent during the day.
German business confidence improved in May for the first time in three months. This is an indicator that Europe’s biggest is rebounding.
The estimates for April durable goods in the poll made by Bloomberg ranged from a drop of 5.9 percent to an increase of 4.6 percent. The Commerce Department modified the March decline from the initially reported 6.9 percent drop.
The increase in orders last month was bolstered by the rebound in demand for commercial aircraft. Aircraft orders went up 18.1 percent in April after the drop of 43 percent the previous month. Boeing said it got orders for 51 aircrafts in April, which was up from 29 in the previous month.