New orders for long-lasting U.S.-made manufactured goods fell by 5.3 percent in January, the biggest drop in five months and more than analysts expected, and a key gauge of business spending also declined, a Commerce Department report showed on Wednesday.
Nondefense capital goods orders excluding aircraft, a proxy for business investment, declined 1.4 percent, which was somewhat less than the 2.0 percent decrease Wall Street analysts were expecting.
For overall durable goods orders, analysts polled by Reuters forecast a 4.0 percent decline. It was the biggest monthly decrease since a matching decline last August.
The bigger-than-expected drop helped push the dollar lower in early trading against the euro and the yen.
The euro had already vaulted above the psychological $1.50 mark for the first time in its 9-year history, and traded at $1.5059 shortly after the report.
The durables data also helped pushed U.S. stock index futures to a session low, and European shares also extended their losses.
Analysts said the report added to a glum U.S. economic picture.
"It just exacerbates the fire with respect to economic weakness going forward," said John Spinello, treasury bond strategist with Jefferies and Co. in New York.
"For the two-month period, durables are basically flat so it is more consistent with what we're seeing in other parts of the economy, i.e. weakness," said Carl Lantz, U.S. interest rate strategist at Credit Suisse in New York.
Orders in the transportation category, which includes civilian and military aircraft, fell 13.4 percent, the largest drop since October 2006.
Excluding the volatile transportation category, the decline in durable goods orders was a more modest 1.6 percent. But excluding defense orders, durables demand fell by a much larger-than-expected 4.7 percent.
Analysts had forecast durable orders excluding transportation to decline 1.3 percent and orders excluding defense to fall 1.2 percent.