New-home sales slowest in 13 years, durables down

By Alister Bull

WASHINGTON (Reuters) - Sales of new U.S. single-family homes fell to the slowest pace in 13 years while orders for durable goods tumbled unexpectedly last month, according to government data that added to signs the economy has stalled.

New orders for long-lasting U.S.-made manufactured goods like refrigerators unexpectedly fell 1.7 percent during February and a key gauge of companies' appetite for investment also shrank. Economists said weaker business spending means the economy will probably contract more sharply than initially thought in the first quarter.

February's drop in machinery orders was 13.3 percent, the steepest decline on record.

A separate report released by the Commerce Department on Wednesday showed single-family home sales fell 1.8 percent to an annualized rate of 590,000. That was the lowest reading since 1995, when they were 559,000, but was slightly ahead of the 580,000 forecast by analysts polled by Reuters.

There's "a rough patch right now in our economy and I'm confident in the long term, we'll come out stronger than ever before," President George W Bush said.

The data raised concerns about corporate profits and pushed U.S. stocks lower, with the Dow Jones Industrial Average shedding 109.74 points, or 0.88 percent, to end

at 12,422.86. The Standard & Poor's 500 Index lost 11.86 points, or 0.88 percent, to 1,341.13, while the Nasdaq Composite Index shed 16.69 points, or 0.71 percent, to 2,324.36.

U.S. Treasury bond prices mostly rose and the dollar recovered a bit on the housing report, but finished the session lower against most major currencies.