U.S. factory orders fell 0.9 percent in December, following a revised 0.8 percent decline (previously -0.4 percent) in November, and a 0.5 percent rise in October. This exceeded expectations in the Econoday survey of forecasters for a 0.6 percent contraction.

New orders for durable goods were previously reported down 2.2 percent in December, following a 2 percent drop in November, and has now been down for four of the last five months.

Manufacturers' shipments have now risen for two straight months, up 0.6 percent in December following a 0.1 percent uptick in November.

A weak durable goods figure, down 2.2 percent in December on a drop in transportation orders, translates to an expected decline of 0.6 percent for factory orders.

Factory orders represent the dollar level of new orders for both durable and nondurable goods. This report gives more complete information than the advance durable goods report which is released one or two weeks earlier in the month.

Investors want to keep their fingers on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth which is less likely to cause inflationary pressures. By tracking economic data like factory orders, investors will know what the economic backdrop is for these markets and their portfolios. The orders data show how busy factories will be in coming months as manufacturers work to fill those orders. This report provides insight to the demand for not only hard goods such as refrigerators and cars, but nondurables such as cigarettes and apparel. In addition to new orders, analysts monitor unfilled orders, an indicator of the backlog in production. Shipments reveal current sales. Inventories give a handle on the strength of current and future production. All in all, this report tells investors what to expect from the manufacturing sector, a major component of the economy and therefore a major influence on their investments.