(The following appeared at Barrons.com on December 12.)
A handful of sectors have begun to revisit the lows reached at the depths of the market downturn, the level that represented the lows for many stocks this year after previous cyclical lows set in July, September and again in October proved to be flimsily constructed. Now, at least for some cyclically sensitive issues, the November bottoms are proving to be just as tentative.
Chief among the economically sensitive issues: the rail carriers, which have been bruised by the downturn in the auto sector. According to Credit Suisse, motor vehicles shipments via rails sank 39% in the first week of December on a year-over-year basis, creating a big headwind for the rail sector, which saw carloads decline 8% in the period. It marked the fifth consecutive week, CS said, in which carloads dropped by as much as 8%.
CSX (CSX) suffered the greatest downturn among the players in the sector, seeing carloads drop by about 15% in the period. Shares have fallen 9% Friday, trading below $32 a share, versus the November low just south of $31 a share. Union Pacific (UNP) dropped 9%, falling below the November low at $44 a share, setting a new low for the year. Burlington Northern (BNI) dropped 5%, trading about $2 above the November bottom.