Transportation Drags Down Durable Goods

Durable goods see a drop of 2.5% for the month of June, the biggest drop in five months.
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) -- 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


(BA) - Get Report

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


(F) - Get Report


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


dropped 0.4% to $37.25,


(WHR) - Get Report

slipped 1% to $54.58 and

Stanley Works

(SWK) - Get Report

was off 2% to $38.90.

--Reported by Jeanine Poggi in New York.

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