Railroad stocks surging after Biden urged Congress to act to avert strike

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Shares of railroad operators rallied Tuesday, as Evercore ISI analyst Jonathan Chappell said President Joe Biden’s urging of Congress to step into the stalled talks between labor unions and rail operators effectively removes the risk of a strike. Biden’s urging comes after a coalition of more than 400 business groups sent a letter asking congressional leaders to step get involved to avert a strike, which many believe would have devastating effects on the U.S. economy. Evercore’s Chappell said there appears to be bipartisan support in Congress to act as soon as the end of this week, or well ahead of the Dec. 9 strike deadline. “We were uncertain on Congress’s willingness to end a strike in a bipartisan manner (mainly owing to strong pro-labor leanings), let alone a week before the anticipated strike date, but this risk is now removed,” Chappell wrote in a note to clients. The Dow Jones Transportation Average DJT, +1.59% rallied 1.1% in morning trading, to outperform by a wide margin the Dow Jones Industrial Average DJIA, +0.01%, which tacked on 53 points, or 0.2%. Among the Dow transports’ rail components, shares of Norfolk Southern Corp. NSC, +1.94% climbed 1.5%, CSX Corp. CSX, +1.80% hiked up 1.4% and Union Pacific Corp. UNP, +2.04% advanced 1.4%. Shares of Matson Inc. MATX, +0.24%, which provides rail intermodal services, gained 1.7%.

This article was originally published by Marketwatch.com. Read the original article here.

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