Transportation Drags Down Durable Goods

WASHINGTON (TheStreet) -- Cars and planes dragged down durable goods in June, resulting in the largest decrease in orders in five months.

Manufacturers' orders for durable goods dropped by 2.5% last month to $158.57 billion, the Commerce Department said on Wednesday. Economists had forecast a 0.6% drop.

This was the biggest setback since a 7.8% tumble in January.

Orders for planes plunged 38.5%, as the recession has severely strangled air travel, forcing some airlines to cancel existing orders for planes.

Aircraft giant Boeing(BA Quote) suffered production delays of its new 787 Dreamliner.

Motor vehicles and parts orders slipped 1% in June, reflecting bankruptcy filings of General Motors and Chrysler, and the more generalized woes of Ford(F Quote).

But excluding the messy transportation sector, durable goods actually rose 1.1%, boosted by demand for primary metals, such as steel, which jumped 8.9%, and industrial machinery, which rose 4.4%.

This steadiness outside transportation could be a sign that there are brighter days ahead.

Shares of durable goods company Black & Decker(BDK Quote) dropped 0.4% to $37.25, Whirlpool(WHR Quote) slipped 1% to $54.58 and Stanley Works(SWK Quote) was off 2% to $38.90.

--Reported by Jeanine Poggi in New York.