WASHINGTON - The number of buyers snapping up new homes dipped unexpectedly in September as the effects of a temporary tax credit for first-time owners started to wear off.

The 3.6 percent drop in September's new home sales, reported by the Commerce Department on Wednesday, was the first decline since March and a distinct sign of weakness in a market that had rebounded strongly during the summer.

The report surprised Wall Street. Stocks fell Wednesday, with the Dow Jones industrial average closing at 9762.69, down 119.48. Homebuilder stocks also tumbled. Hovnanian Enterprises led the way with a 9 percent drop, or 38 cents, to $3.92.

On the positive side, however, the government reported that orders to U.S. factories for big-ticket manufactured goods rose 1 percent in September as demand for machinery offset weakness in commercial aircraft and autos.

Analysts expect that the overall economy, as measured by gross domestic production, grew at an annual rate of 3.3 percent in the July-September quarter after contracting for a record four straight quarters. The third-quarter GDP report is due today.

The drop in new home sales could help the lobbying campaign of real estate agents and homebuilders. They want Congress to extend the tax credit of up to $8,000 for first-time buyers.

New home sales fell to a seasonally adjusted annual rate of 402,000 in September, down from a downwardly revised 417,000 in August. Economists surveyed by Thomson Reuters had expected a pace of 440,000.

New home sales, however, are still up 22 percent from the bottom in January, and analysts don't expect them to recede too far.