NEW YORK (Thomson Financial) - The transportation sector was broadly lower
Wednesday, underperforming its industrials brethren by a wide margin, with
United Parcel Services' warning of a potential profit shortfall and negative
analyst comments on the trucking and airline sectors all contributed to the dour
mood.
The iShares Dow Jones Transportation Index ETF (IYT) was down 1.7% at
$81.08. In comparison, the Dow industrials "Diamonds" ETF (DIA) slipped 0.7% to
$121.17.
UPS shares slid 0.9% to $72.11 after the package delivery service said its
first-quarter earnings guidance "will be difficult to achieve" if package volume
continues to decline through March.
Shares of rival Fedex Corp. lost 1.2% to $87.10.
Among truckers, Werner Enterprises shed 5.4% to $17.68 after a Bear Stearns
downgrade to underperform from peer perform. Analyst Edward Wolfe also lowered
his first-quarter earnings estimates for several other truckers, saying the
sector appears ahead of itself given lackluster industry pricing and higher fuel
costs.
Knight Transportation lost 1.6% to $15.66, J.B. Hunt Transport gave up 2.6%
to $28.67 and Covenant Transportation dropped 2% to $6.78.
Airlines were the hardest hit subsector, after JPMorgan Chase downgraded a
number of companies, saying high fuel costs are overwhelming savings generated
by the group's recent round of bankruptcies.
Among the more-active air carriers, AMR Corp. slumped 13% to $9.27,
Southwest Airlines slid 6.8% to $11.55, Delta Air Lines descended 16% to $10.19
and Northwest Airlines declined 16% to $10.26.
Tomi Kilgore
tk1
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