The increase in December was partly due to a significant increase in orders for machinery, which rose 6.5 percent in December after rising by 3.1 percent in November. Orders for transportation equipment also saw some further upside after moving sharply higher in the two previous months.

The report also showed that shipments of durable goods rose 3.5 percent in December, reaching the highest level since the series began. At the same time, inventories of durable goods increased only modestly after rising 0.6 percent in November.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks advanced Thursday, lifted by strengthening U.S. dollar and continuously falling crude oil prices. The Nikkei climbed 1.2% to 15,835.98, Taiwan’s Weighted index surged 1.24%, while South Korea’s Kospi rebounded from early losses to finish up 0.24%. Shanghai stock markets were closed for the Chinese Lunar New Year holiday and will reopen on February 6.

European stocks traded higher at mid-day, despite a weaker close of U.S. markets overnight. European averages were boosted by gains at the industrial conglomerate Siemens AG and telecom giant Deutsche Telecom. The German DAX 30 rose 0.9%, the French CAC 40 climbed 0.7%, and London’s FTSE 100 advanced 0.4%.

OIL, METALS, CURRENCIES

Crude oil prices advanced, following a three-day sell-off, as continuous worries about international supplies counteracted the fuel inventories increase. Light sweet crude for March delivery gained 21 cents to $66.06 a barrel. London Brent rose 37 cents to $64.61.

European gold prices climbed. In London gold traded at the fixed price of $562.25, up from $562. In Zurich the precious metal traded at $560.90, up from $560.70. In Hong Kong gold surged $10.90 to close at $562.10. Silver opened at $9.46, up from $9.41.

The U.S. dollar was strong against most other major currencies. The euro was quoted at $1.2241, down from $1.2248. The dollar bought 115.88 yen, up from 115.64. The British pound stood at $1.7851, up from $1.7838.

EARNINGS NEWS

Caterpillar Inc., (CAT: chart), machinery maker, reported Q4 net income of $1.20 a share, compared with 77 cents a share in the year-ago period, beating analyst estimate of $1.10 a share. Sales at the company in Q4 advanced by more than 12% to $9.66 billion from $8.58 billion.

Lockheed Martin, (LMT: chart), defense contractor, reported Q4 earnings of $1.29 per share, up from 83 cents per share last year beating analyst estimate for earnings of $1.15 per share. Net sales for the period came in at $10.22 billion, up from last year''s sales of nearly $9.97 billion.

Honeywell International, (HON: chart), industrial company, reported Q4 earnings of 62 cents a share, up from 30 cents a share a year-ago, matching analyst estimate. On a continuing operations basis, the company posted earnings of 61 cents a share in Q4. Sales advanced in Q4 to $7.28 billion from $6.64 billion in the same period a year ago.

AT&T Inc., (T: chart), communication company, reported that Q4 profit reached 46 cents a share, from up more than double from 21 cents in the year-ago period, with revenue up 26%. Adjusting for merger-related, severance, and Cingular hurricane costs, and a gain from tax settlements, the company would have earned 48 cents a share, beating analysts’ forecasts of earnings of 45 cents.

Baxter International, (BAX: chart), medical products company, reported Q4 net earnings of 46 cents a share, from continuing operations on a GAAP basis up from 17 cents a share a year ago. If not for special charges, the company earned 60 cents a share in Q4, topping analyst estimate of 58 cents a share. Sales dropped 4% to $2.5 billion.

ChoicePoint, (CPS: chart), I.D. services company, reported Q4 net earning of 30 cents a share, down from 43 cents a share a year ago despite 11% revenue growth, missing analyst estimate of 45 cents a share. If not for a 14 cents charge related to an FTC probe of fraudulent data access, the company would have earned 44 cents a share.

Eli Lilly and Company, (LLY: chart), drugmaker, reported that Q4 net income was 64 cents a share, up from a net loss and no earnings per share, missing analyst estimate of 78 cents a share. The latest result includes 14 cents a share of charges from restructuring and asset impairments. Sales in Q4 advanced 6% to $3.88 billion.

First Data Corp, (FDC: chart), payment systems company, reported a 14% drop in Q4 net income to 52 cents a share and added it plans to separate its Western Union consumer payments business into an independent publicly traded company. Revenue for Q4 increased 3% to $2.77 billion. The company announced that the Western Union business will be spun-off to First Data shareholders. The separation is due to be completed in the second half of 2006.

Danaher Corp, (DHR: chart), industrial and consumer products manufacturer, reported Q4 net earnings of 81 cents a share, up from 67 cents in the same period of 2004, beating analyst estimate by a penny. Sales rose 14.5%, topping $2.26 billion compared to $1.98 billion in the prior year. Revenue growth from existing businesses increased 5.5%. Operating profit reached $367.6 million from $316 in the year-earlier Q4, as operating margin widened to 16.2% from 16.0%.

Potash Corp., (POT: chart), mining and production and sale of potash company, reported Q4 net income of $1.09 a share, up from the previous year''s 88 cents, topping analysts’ forecasts of 98 cents a share. Potash Corp. accelerated stock buybacks during Q4, repurchasing 3.6 million shares for $290.6 million. The company also expects earnings growth of 10% to 30% for 2006, with profit projected at $1 to $1.25 a share for the Q1 and at $5.25 to $6.25 a share for the full year. Analysts’ estimates are for $1.41 and $5.71 a share, respectively.