Sector Snap: Heavy Machinery Makers Slipping

NEW YORK (AP) — Shares of heavy machinery makers slipped Wednesday after a government report disclosed that orders for nonmilitary, non-aerospace goods fell last month.

The Commerce Department said that while the overall level of order for durable goods — items expected to last at least three years — rose in July, orders for products like tractors, construction equipment and diesel engines declined 0.3 percent.

Cliff Waldman, economist for the Manufacturers Alliance/MAPI, called the government report disappointing.

"New orders for non-defense capital goods, excluding aircraft, a proxy for business equipment spending, slipped a bit after two strong months and remains more than 20 percent below year-ago levels," he added.

"U.S. and global activity has stabilized and financial conditions have improved modestly," Waldman said. "But business decision makers are going to have to see firmer and more consistent evidence of a return to the type of economic conditions that will produce solid profits before they are willing to more consistently strengthen their investment commitments and add capacity."

Paul Ashworth, U.S. senior economist for Canada-based Capital Economics Ltd., said the data "is a little concerning as far as the outlook for business investment goes."

In morning trading, shares of Deere & Co. fell $1.32, or 2.8 percent, to $44.99, Joy Global Inc. declined $1.20, or 3 percent, to $39.26 and Cummins Inc. slipped $1.95, or 4.1 percent, to $46.05.