Transportation stocks slip after GDP, durable goods reports

Several railroad, trucking and logistics company stocks fell Wednesday in response to the Commerce Department’s updated Q1 GDP estimate and May durable goods report.    Several railroad, trucking and logistics company stocks fell Wednesday in response to the Commerce Department’s updated Q1 gross domestic product (GDP) estimate and May durable goods report, according to investment advisor Seeking Alpha.
   Transportation sector stocks that fell yesterday included trucking companies Knight Transportation (KNX), which was down 4.5 percent; Swift Transportation (SWFT), down 5.5 percent; YRC Worldwide (YRCW), down 2.2 percent; Heartland Express (HTLD), down 2.6 percent; Celadon Group (CGI), down 2 percent.
   NAFTA railway member Kansas City Southern (KSU) fell 2.2 percent, while logistics providers ArcBest (ARCB) JB Hunt Transport (JBHT) dropped 3.9 percent and 2.1 percent, respectively, and railroad freight equipment providers Greenbrier (GBX) and Trinity Industries (TRN) were both down 1.6 percent.
   Logistics blue chips FedEx (FDX) and UPS (UPS) both slipped as well, dipping 0.9 percent and 0.8 percent, respectively.
   Seeking Alpha attributed the decline to a first quarter GDP estimate it said was “revised in-line with expectations” and a durable goods report it characterized as “weak.” Both GDP and durable goods are considered key indicators in the overall health of the U.S. economy.
   “Most analysts agree the U.S. economy is rebounding from a weak first quarter, and today’s final GDP will likely offer more evidence that forecast is turning into reality,” said Yoel Minkoff, SA news editor.
   GDP contracted at an annual rate of 0.2 percent annual rate in the first quarter of 2015, according to the “third” estimate from the U.S. Department of Commerce. Commerce in its “second” estimate last month reported a 0.7 percent annual rate reduction in GDP for the first quarter.
   Real exports of goods and services decreased 5.9 percent in the first quarter, while real imports of goods and services increased 7.1 percent.
   Financial analysts attribute the decline in GDP to harsh winter weather, West Coast port congestion, a strong dollar and spending cuts in the energy sector caused by plummeting oil prices, among other factors. The overall outlook among experts is relatively positive, however, as growth estimates for the second quarter are currently between 2 percent and 3 percent rate.
   GDP grew at an annual rate of 2.2 percent in the fourth quarter of 2014, and has expanded 2.9 percent over the past year.
   The U.S. Census Bureau announced Tuesday new orders for manufactured durable goods in May fell 1.8 percent to $228.9 billion, following a 1.5 percent decrease in April. The bureau noted this is the third decline in durable goods in the last four months.
   Transportation equipment orders, which have also decreased in three of the last four months, were a primary driver in the decline, falling 6.4 percent to $71.7 billion.
   Shipments of manufactured durable goods, down four of the last five months, decreased 0.1 percent to $239.9 billion in May, following a 0.2 percent decrease in April.