NEW YORK—Wall Street posted a sizable advance Wednesday after the government reported a larger-than-expected increase in orders for big-ticket manufactured goods that indicated the economy could be stronger than some investors thought.

The Commerce Department said orders for durable goods jumped 1.3 percent in July compared with the previous month, led by a big gain in demand for commercial aircraft. That was well above the 0.1 increase expected by economists surveyed by Thomson/IFR.

Durable goods, which also include cars, appliances and machinery, are under scrutiny no...

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