12/28/2009 11:21 AM ET
Transportation stocks are showing notable weakness during trading on Monday, with railroad stocks weighing down the sector by a considerable margin. The weakness comes after some pessimistic comments about the railroad sector in a report from Barron’s.
The losses by railroad stocks are contributing to a 1.1 percent loss by the Dow Jones Railroads Index. With the loss, the index is pulling back off of the fourteen month closing high set last Thursday.
The pullback comes after Barron’s said comments from the management of Burlington Northern Santa Fe (BNI) indicated that the economy and subsequently the railroad industry would not begin to see a substantial recovery until the year 2011.
Despite the comments, Burlington Northern stock is showing a lack of direction and its currently up by only 0.1 percent, as it remains in a tight trading range.
The previous significant move for the stock came in early November, when billionaire investor Warren Buffet announced he reached a deal for his firm Berkshire Hathaway Inc. (BRK-A) to buy the rail transport firm for $100 per share.
Meanwhile, Trinity Industries Inc. (TRN) and CSX Corp. (CSX) are two of the sector’s steepest decliners, falling by 2.4 percent and 2.1 percent, respectively. Trinity remains in a recent trading range, while CSX is pulling back off of Thursday’s fifteen month closing high.
Genesee & Wyoming Inc. (GWR), Norfolk Southern Corp. (NSC) and Union Pacific Corp. (UNP) are also retreating, moving off of their recent highs, while American Railcar Industries (ARII) is bucking the downtrend in the sector, rising by 4.2 percent.
by RTT Staff Writer
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