(The Associated Press circulated the following article on February 27.)
WASHINGTON — Shares of railroad operators traded lower on Tuesday amid mixed news about future coal freight and a lackluster day on Wall Street.
Shares of Union Pacific Corp. fell $3.73, or 3.7 percent, to close at $97.99. Shares of Burlington Northern Santa Fe Corp. tumbled $2.81, or 3.4 percent, to finish the session at $78.89. Shares of Norfolk Southern Corp. gave up $2.35, or 4.7 percent, to $47.35, while shares of CSX Corp. retreated $2.05, or 5.2 percent, to $37.29.
All the stocks trade on the New York Stock Exchange.
The activity came after mixed news about future coal demand that could affect freight volume for Union Pacific, the nation’s largest railroad, and its primary rival, Burlington Northern.
In a bit of positive news for the western railroads, the Federal Railroad Administration on Monday afternoon denied a $2.3 billion loan application from the Dakota, Minnesota, & Eastern railroad, which would have given the private operator financing to lay track into the sprawling Powder River Basin coal field in southern Wyoming.
Thomas Wadewitz, an analyst at JP Morgan, called the decision “a significant positive” for Union Pacific and Burlington Northern, which essentially operate a duopoly out the region. The decision also has positive implications for future price increases and volume, which could have been transported on DM&E, Wadewitz said in a note to clients after the markets closed on Monday.
On Monday TXU Corp., the largest electric utility in Texas, said a group of investors would take it private for about $32 billion. Analysts expect the deal to kill eight of 11 coal-fired plant the utility planned to build in the coming years, a development that could pinch the long-term growth story for Powder River coal.
Shares of Canadian railroads also tumbled, as Canadian Pacific Railway Ltd. surrendered $1.63, or 3 percent, to $53.06 and Canadian National Railway Co. lost $1.67, or 3.6 percent, to $44.66. Both trade on the NYSE.
The broader markets gave railroads little help. The Dow Jones Industrial Average fell 416.02, or 3.3 percent, to 12,216.24. The decline was the Dow’s worst since Sept. 17, 2001, the first trading day after the terror attacks on New York and Washington, when the blue chips closed down 684.81, or 7.13 percent.
The Standard & Poor’s 500 Index lost 50.29, or 3.5 percent, to close at 1,399.08, and the Nasdaq Composite Index finished off 96.65, or 3.9 percent, at 2,407.87.