Out of the Gate:Freight carriers rebound
January 22, 2008: 11:06 AM EST
Jan. 22, 2008 (Thomson Financial delivered by Newstex) --
NEW YORK (AP) - Shares of major railroads, trucking companies and freight forwarders recovered Tuesday after most fell initially in line with a broader market reacting to fears of a recession in the U.S. led and steep declines in overseas markets.
The Federal Reserve slashed a key interest rate by three-quarters of a percentage point before the market opened. The cut appeared to have only a slight effect on investors as the sell-off wasn't quite as drastic as initially feared. The unexpected move reduced the federal funds rate, the rate at which banks make short-term loans to one another, to 3.5 percent.
Freight companies did not rebound as expected following the two previous Fed rate cuts late last year. The industry continues to be buffeted by weak demand, poor pricing and record fuel costs.
Strong fourth-quarter earnings from CSX Corp. (NYSE:CSX) may have aided railroads in recovering from early losses. The Jacksonville, Fla.-based rail said Tuesday its profit rose more than 5 percent in the fourth quarter, as efficiency improvements and business expansions offset record fuel costs. CSX Corp. added $2.31, or 5.6 percent, to $43.50.
Among major railroad operators, Union Pacific Corp. (NYSE:UNP) rose 55 cents to $111, while shares of Burlington Northern Santa Fe Corp. (NYSE:BNI) rose 15 cents to $77.08. Norfolk Southern Corp. (NYSE:NSC) , which is scheduled to report earnings after the market closes Tuesday, rose 94 cents, or 2.1 percent, to $45.10.
In the trucking sector, YRC Worldwide Inc. (NASDAQ:YRCW) gained 20 cents to $15.24 and Conway Inc. fell 5 cents to $40.81 after trading as low as $37.78. Arkansas Best Corp. (NASDAQ:ABFS) rose 20 cents to $20.20 and Universal Truckload Services Inc. (NASDAQ:UACL) lost 23 cents to $18.41.
Package delivery company feed Corp. slipped 85 cents to $83.31 but shares earlier traded at $80, their lowest intraday level since September 2005. Shares of rival United Parcel Service Inc. (NYSE:UPS) fell 13 cents to $67.05 after hitting a 52-week low of $64.01 in morning trading.
