News Briefs - Dec. 5
- Dow Closes Above 10,000; Nasdaq Above 2,000
- Senate Passes Railroad Retirement Revision
- Russia Increases Planned Oil Production Cut
- Postal Service Reports $1.68B Loss for 2001
- Davis Wants Open Border, But Tight Security
- EGL Expects to Meet Forecasts
- Ford Says 4Q Loss Will Be Larger Than Forecast
- Canadian Pacific to Link With LTL Carrier
- AutoZone Sees Profits Rise
- Senate Passes Railroad Retirement Revision
Dow Closes Above 10,000; Nasdaq Above 2,000
The Dow Jones Industrial Average rose 220.45 points to close at 10,114 on Wednesday, marking the first time since Sept. 5 it has closed above 10,000, news services reported.The Nasdaq Composite Index rose 83.77 to 2046 pushing above 2,000 for the first time in almost four months, while the Standard & Poor's 500 gained 25.55 points.
Positive comments from technology companies, and a report showing growth at service businesses helped spark Wednesday's rally, Bloomberg reported. However, analysts said breaking through milestones like 10,000 or 2,000 is symbolic -- more important to the investors' mood than as an indicator of the state of the economy.
Since the markets touched three-year lows on Sept. 21 after the terrorist attacks 10 days earlier, the Dow has regained 21% of its value and the Nasdaq is up 41%, Reuters said. Transport Topics
Senate Passes Railroad Retirement Revision
A bill to change the way Railroad Retirement System funds are invested was passed 90-9 by the Senate on Wednesday.The Railroad Retirement System was created before the Social Security System and, for railroad employees, takes the place of Social Security.
The measure passed by the Senate would permit some $15.3 billion in pension funds to be invested on Wall Street instead of in Treasury bonds, to which the funds are currently limited.
The measure will also reduce the taxes paid in to the system, while increasing benefits for retirees and surviving spouses.
A reduction in the cost of railroading or a financial gain for rail employees that is not paid by management both have a negative impact on the ability of trucks to compete with railroads.
An identical measure, H.R. 1140, was passed by the House 384-33. However, because the Senate chose to take an earlier version, H. R. 10 and substitute the language of H.R. 1140, the bill will be returned to the House for another vote. Transport Topics
Russia Increases Planned Oil Production Cut
After weeks of haggling with the Organization of the Petroleum Exporting Countries, Russia has agreed to cut crude oil production by 150,000 barrels a day in an effort to prop up prices, news services reported.Russia, OPEC's biggest rival, had previously balked at the idea of cutting production, but pledged Wednesday to trim levels, Bloomberg reported.
OPEC has said that if Russia and other non-member countries were to cut their production, the cartel's members would cut production by 1.5 million barrels of crude oil a day.
On the news, the price of Brent crude surged up 78 cents a barrel to $20.07 in trading on the International Petroleum Exchange in London, Reuters said.
The price of crude oil impacts the price of diesel fuel and gasoline and can effect the cost of providing trucking services as a result. Transport Topics
Postal Service Reports $1.68B Loss for 2001
The U.S. Postal Service said Tuesday it lost $1.68 billion for the 2001 fiscal year ended Sept. 30, news services reported. This was the second consecutive year the agency posted a loss, after making profits for five years.Hurt by increased competition, the terrorist attacks and a poor economy, USPS said that mail volume dropped for the first time in a decade. Volume totaled 207 billion items, down about 400 million from the year before.
Postmaster General John Potter said that without the drop that occurred after Sept. 11, the loss would have been $200 million to $300 million less.
The Postal Service, which operates a large fleet of trucks of various types, is also a competitor with package delivery companies like UPS or FedEx.
Because volume has remained lower in the first two months of the 2002 fiscal year, postal managers are trying to cut expenses, seeking additional help from Congress and discussing the possibility of speeding up a rate increase. Transport Topics
Davis Wants Open Border, But Tight Security
California Gov. Gray Davis pressed Vicente Fox for a more open border, while stressing the need for tight security because of terrorist threats, the Los Angeles Times reported.The two leaders met privately and discussed steps they both could take to help speed commercial traffic across the border and to aid Mexican farm workers in crossing the border without lengthy delays at the border.
Davis said that while his top priority was security, he stressed that business does go on and crops must still be harvested, the Times said.
Since Sept. 11, there have been delays at many border crossings because of more intense security at checkpoints. Transport Topics
EGL Expects to Meet Forecasts
EGL Inc., the parent company of freight forwarder Eagle Global Logistics, said Tuesday that it expects fourth-quarter earnings to match or beat current estimates, Bloomberg reported.While analysts are predicting a profit of 2 cents per share, the Houston-based company believes its profits may be as high as 4 cents per share. EGL said freight levels are rising after a huge dip immediately following the terrorist attacks.
Andy Knuth, a portfolio manager, told Bloomberg this shows that EGL is in the early stages of a recovery.
Meanwhile, EGL said it will raise about $85 million in a private placement of 5% subordinated notes that can be converted into common stock. Transport Topics
(Click here for a press release from EGL.)
Ford Says 4Q Loss Will Be Larger Than Forecast
Ford Motor Co. announced Wednesday that it now expects its fourth-quarter loss to be greater than previously forecast. Bloomberg reported.Previously, the struggling auto giant had forecast a loss to be less than the 28 cents per share it lost in the third quarter. Now Ford expects to lose 50 cents per share, excluding one-time charges, the business news wire said.
Monday, Ford announced it would be laying off 630 workers and trimming benefits to about 45,000 white-collar employees for a savings of $300 million a year. Transport Topics
(Click here for the press release.)
Canadian Pacific to Link With LTL Carrier
Canadian Pacific Railway announced Wednesday that it has signed a 10-year $400 million contract with Consolidated Fastfrate, Canada's largest less-than-truckload carrier, to offer combined service.The allied companies will offer intermodal freight hauling services throughout the United States and Canada, Canadian Pacific said.
"Under this contract, we will give North American shippers a level of intermodal transportation with trains and trucks so closely linked that it will be hard to tell where one leaves off and the other begins," said Robert J. Ritchie, president of Canadian Pacific. "That's a breakthrough."."Transport Topics
(Click here for the full press release.)
AutoZone Sees Profits Rise
Vehicle parts retailer AutoZone Inc. beat Wall Street estimates as it reported a 65% per share increase in its first-quarter profit, news services said.The Memphis, Tenn.-based company earned $84.1 million, or 76 cents per share for the quarter ended Nov. 17, compared with 46 cents per share a year ago. Analysts on average expected the company to earn 60 cents per share, Reuters reported.
Results were boosted by an increase in market share and an aging vehicle population, the company said in a release. Sales for the quarter increased 11% to $1.18 billion, from $1.06 billion for the year-ago quarter.
During the quarter, the company agreed to sell TruckPro, its heavy-duty truck parts subsidiary. The deal is expected to close next quarter. Transport Topics
(Click here for the full press release.)
