UPS - Why Shares of Transport Stocks Are Falling Today
Shares of transport companies were under pressure on Monday morning amid fresh evidence that the COVID-19 coronavirus outbreak is taking its toll on the economy. Shares of FedEx (NYSE: FDX) and United Parcel Service (NYSE: UPS) each traded down more than 10%, and Old Dominion Freight Line (NASDAQ: ODFL) and Union Pacific (NYSE: UNP) each were off sharply in morning trading.
Shares of shipping and transport companies have been under pressure for weeks as signs grew that the novel coronavirus outbreak was disrupting supply chains and causing global shipping volumes to tumble. We still don't know the full extent of the damage, but a couple of developments pre-market provided an indication of the risk to the U.S. economy.
The Federal Reserve on Sunday night slashed the benchmark federal funds rate by 100 basis points to zero, a sure sign that the Fed's internal data shows the U.S. economy under distress.