Factory Orders Expected to Fall 0.4% in April

The Commerce Department today is expected to report that factory orders, a volatile report month-to-month, probably dipped 0.4% in April after surging 2% during March. Most of the weakness probably came in the transportation industry. Other industries are expected to exhibit strength, analysts said.

Also, the weekly Labor Department report on jobless claims is likely to signal that unemployment is low. First-time claims for state unemployment benefits probably were unchanged in the week ended May 29 at a seasonally adjusted 300,000, analysts said.

Retail Sales Up: U.S. retail sales at stores open at least a year are expected to rise about 5% in May, as shoppers snapped up the latest spring fashions and bought action figures based on the new “Star Wars” movie, analysts are forecasting. Same-store sales are a key indicator of a retailer’s business because they exclude sales from new and closed stores. Many U.S. retailers are scheduled to report sales today.

Wal-Mart is expected to report among the highest gains, with sales rising about 7%. The world’s largest retailer surpassed Toys R Us Inc. last year as the biggest U.S. toy retailer based on market share, according to a study by market research firm NPD Group. Among department stores, Federated Department Stores Inc. is expected to fare the best, with a 4% gain. Federated operates the Bloomingdale’s, Macy’s, Rich’s and Stern’s chains.

The expected overall gain is less than a 7.7% rise in May 1998, in part because the Memorial Day holiday fell a week later this year and shifted some sales into June, said Bank of Tokyo-Mitsubishi Ltd.