The Commerce Department said on Wednesday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, jumped 6.3 percent, the biggest gain since December 2011, after slipping 0.3 percent in December.
Economists had expected this category to only rise 0.2 percent.
Durable goods orders excluding transportation increased 1.9 percent, the largest gain since December 2011, after increasing 1 percent in December. That was well above economists' expectations for a 0.2 percent gain.
However, overall orders for durable goods - items from toasters to aircraft that are meant to last at least three years - tumbled 5.2 percent as demand for civilian and defense aircraft fell sharply.
Last month's drop was the first since August.
UGH JOHNSON, CHIEF INVESTMENT OFFICER OF HUGH JOHNSON ADVISORS LLC IN ALBANY, NY:
"This is an extremely volatile time series and very tough to predict. Based on that alone, the fact is we got a disappointment in the headline number and that is not likely to be a market mover. The ex-transports is a more useful number.
"You have parts of this report that are components of the leading indicators that tell us where we are going and not where we've been and those numbers are very encouraging. On balance, you'd have to conclude it's positive but this is not a market mover primarily because it is volatile, unpredictable and it's an old number. We are really interested in where we are going, not where we've been."
DAVID ADER, HEAD OF GOVERNMENT BOND STRATEGY, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT:
"Cutting to the chase this is a mix between the revisions and some soft elements versus the specific strength in core orders -- we might want to smooth the last four months to come up with a 3.1 percent gain on average which is okay and merely that.
The (Treasuries) market is doing nothing with this and we concede it's a bit hard to read one way or the other. Overall the market tone is firm over the course of the morning and holding the modest overnight gains."
BORIS SCHLOSSBERG, MANAGING DIRECTOR FX STRATEGY, BK ASSET MANAGEMENT, NEW YORK:
"The miss in transportation was expected. The fact that it is up 1.9 percent on non-transport is relatively okay for the U.S. economy. It suggests we are muddling along. The dollar is right now at the mercy of what is going on in Europe. We are living and dying by the headlines from Italy."
STEPHEN STANLEY, CHIEF ECONOMIST, PIERPONT SECURITIES, STAMFORD, CONNECTICUT
"Both aircraft and defense came off in January after some pretty strong figures earlier. The underlying pieces of the report were actually pretty good.
I am skeptical that the sequester is already having an impact (on the defense orders). This is a category that's always very volatile.
"With the Boeing stuff, I haven't heard any reports about airlines cancelling their orders. This could be one-month lull rather than something greater. There are only two players in commercial airline production."
STOCKS: U.S. stock index futures Were slightly higher BONDS: U.S. Treasuries held on previous gains FOREX: The dollar pared losses versus Japanese yen
(Americas Economics and Markets Desk; +1-646 223-6300)