NEW YORK (CNN/Money) - April orders for long-lasting goods made in the United States posted the largest drop in 20 months, the government reported Wednesday, coming in well below economists' forecasts.

YOUR E-MAIL ALERTS Durables Orders Economy or Create your own Manage alerts | What is this?

Durable goods orders sank 2.9 percent to $191.3 billion last month after coming in at a revised increase of 5.7 percent in March, the Commerce Department reported. Economists had expected a drop of 0.8 percent, according to Briefing.com.

Excluding transportation, new orders fell 2.1 percent, and excluding defense, new orders dropped 2.4 percent, indicating a broad-based decline in orders from the manufacturing sector.

Following the report, U.S. Treasurys moved higher, while stock prices were mixed.

In a separate report, the Commerce Department said new home sales plunged 11.8 percent in April to a seasonally adjusted annual rate of 1.09 million units, compared with a record high rate of about 1.24 million units in March.

April's decline in durable goods orders followed a big gain in March and a 3.9 percent jump in February. Considering that and the notoriously volatile nature of this series, few economists were alarmed by the decline.

"Look for orders to rebound in May, reflecting broad-based recovery within the manufacturing sector," Edward Yardeni, chief investment strategist at Prudential Financial, said in a note to clients.

Orders for non-defense capital goods excluding aircraft, considered a proxy for business investment, fell 3.5 percent in April. But that followed gains of 6.0 percent and 2.3 percent in March and February, respectively.