WRAPUP 4-US durable goods orders fall, job market healing

* Durable goods orders unexpectedly fall in Feb

* Business spending plans drop for a second straight month

* Jobless claims fall, four-week average at 2-1/2-year low

* Oracle profit beats estimates but Best Buy disappoints
(Adds details on Oracle results, Best Buy forecast)

By Lucia Mutikani

WASHINGTON, March 24 (Reuters) – Orders for long-lasting
U.S. manufactured goods fell in February as companies scaled
back investment plans for a second month in a row, suggesting a
cooling off in business spending.

Other data on Thursday showed the labor market’s recovery
was becoming well-established, with new claims for jobless
benefits falling last week and the four-week moving average
dropping to it lowest level in more than 2-1/2 years.

Economists said the weak manufacturing report posed a risk
to first-quarter growth, but they cautioned against placing too
much weight on it, given the data was in stark contrast to
other upbeat surveys on factory activity. Data on durable goods
orders is also very volatile.

“If the numbers continue to be soft, that would be
something to be concerned about, but we are seeing very strong
manufacturing numbers from other reports,” said Robert Dye, a
senior economist at PNC Financial Services in Pittsburgh.

Non-defense capital goods orders excluding aircraft, a
closely watched proxy for business spending, fell 1.3 percent
in February after a 6.0 percent drop the prior month, the
Commerce Department said.

Economists had expected the business spending gauge to rise
4.5 percent last month.

The weakness in business demand and a big drop in defense
aircraft orders helped pull down overall orders for so-called
durable goods, items meant to last three years or more, by 0.9
percent. They had risen 3.6 percent in January.

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INSTANT VIEW-US jobless claims & durables goods orders

[ID:nN24115173]

US jobless claims graphic: http:/r.reuters.com/syw68r

US durable goods graphic: http:/r.reuters.com/vyw68r

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Business software and server hardware giant Oracle Corp
(ORCL.O: Quote, Profile, Research) defied the weaker data and reported a
stronger-than-expected 37 percent rise in sales for the third
quarter ended Feb. 28..

However, consumer electronics retail bellwether Best Buy
Corp (BBY.N: Quote, Profile, Research) presented a lackluster fiscal-year profit outlook.
It posted its third straight quarter of same-store sales
declines as budget-conscious U.S. shoppers shunned newer
technologies such as 3-D and Internet-based televisions. Its
shares fell 5 percent.

“We are fully aware that consumers are still relatively
constrained, and some of our major categories are coming off
challenging years,” Best Buy Chief Executive Brian Dunn told a
conference call. “We are still assuming that some of these
headwinds will continue.”

CLAIMS FALLING

A second report from the Labor Department showed initial
claims for state unemployment benefits slipped 5,000 to a
seasonally adjusted 382,000, a touch below economists’
expectations for a fall to 383,000.

The four-week moving average of new claims — a better
measure of underlying trends — dropped 1,500 to 385,250, the
lowest since mid-July 2008.

It was the fourth straight week the closely watched average
held below the 400,000 level that economists associate with
steady job growth.

Until recently the economy’s job production had been
dismal. But in February, employers hired 192,000 new workers,
the most in nine months.

The Federal Reserve has acknowledged the labor market is
improving but nonetheless appears ready to complete its planned
purchase of $600 billion in government bonds to help ensure
recovery.

“We are still in a range that suggests job growth of around
200,000 per month, not quite yet to the level you need to be
able to get 250,000 to 300,000, which is where the Fed wants to
be on job growth,” said John Canally, an economist at LPL
Financial in Boston.

Some economists cautioned that the devastating earthquake
and tsunami in Japan and rising gasoline prices could dent
business confidence and cause companies to delay hiring.

The data had little impact on U.S. financial markets, where
stocks rose amid optimism about corporate earnings. U.S.
government debt prices slipped, while the dollar fell against
the euro on hopes European policymakers would be able to
contain a political and debt crisis in Portugal.

Signs the labor market recovery was taking hold were
underscored by a drop in the number of people still receiving
jobless benefits under regular state programs after an initial
week to a 2-1/2 low in the week ended March 12.

This data for so-called continuing claims covered the week
for the household survey from which the U.S. unemployment rate
is derived. The jobless rate dipped to 8.9 percent in February
from 9.0 percent in January and has dropped 0.9 percentage
point in the past three months.
(Additional reporting by David Lawder; Editing by Andrea
Ricci, Dan Grebler and Andrew Hay)

WRAPUP 4-US durable goods orders fall, job market healing