MARKETWATCH

Stocks and bonds dropped for a second straight day. The market moves followed an announcement by the Commerce Department that factory orders were up 4.4 percent in August, the biggest gain in two years for this key sign of industrial health. Economists had been expecting a slightly more modest rise of 3.3 percent or so. It was the latest in a string of indications that the economy is running strong, and reinforced fears of inflation that have ruined the market's Indian summer rally. The Dow Jones industrial average was down as much as 50 points during the day on Wednesday but rebounded to close with a 13.79 point loss at 3787.34. The S&P 500 fell 1.07, to 453.52. NASDAQ stocks dropped 1.02, to 746.28. And bond prices dropped sharply, driving the yield on the benchmark 30-year Treasury up to 7.95 percent from 7.89 percent on Tuesday. That's the highest yield on the long bond since June 1992. The price of gold was up 70 cents, to $392.25 in London trading.