Lumber futures rose the most allowed by the Chicago Mercantile Exchange, capping the biggest weekly gain since July, as a rebound in demand for U.S. capital equipment bolstered prospects for industrial materials.
The Commerce Department said orders rose 4.1 percent in August after a 5.3 percent decline in July, signaling a slowdown in business investment may be less severe than some economists projected. Durable-goods orders, excluding transportation, rose 2 percent. The Standard & Poor’s 500 Index rose as much as 2.1 percent.
“There was some general economic news that came out this morning, and the stock market improved,” said Hakan Ekstrom, the president of Wood Resources International LLC in Bothell, Washington. “That could spill over to lumber.”
Lumber futures for November delivery rose the CME’s $10 limit, or 4.3 percent, to settle at $240.50 per 1,000 board feet at 1:13 p.m. in Chicago. This week, the price jumped 10 percent, the most since the five days ended July 2. The commodity has surged 38 percent in the past year.
Economists had projected durable-goods orders, excluding transportation, would fall 1 percent, according to the median of 72 forecasts in a Bloomberg survey.
“This is reassuring news,” said Dean Maki, the chief U.S. economist at Barclays Capital Inc. in New York. “Capital-goods spending still seems to be on a very solid underlying trend.”
Yesterday, futures reached $243.50, the highest price since June 4. This week, the Commerce Department reported a jump in U.S. housing starts that revived prospects for construction materials.
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