Transportation stocks sink, with industry ETF on track for biggest drop since October

MW Transportation stocks sink, with industry ETF on track for biggest drop since October

By Christine Idzelis

Airline stocks were falling sharply Wednesday

Transportation stocks were being punished on Wednesday, with sharp drops weighing on an exchange-traded fund whose top holdings include airlines, railroads and a trucking company.

Shares of the iShares U.S. Transportation ETF IYT were sliding 2.7% in late-afternoon trading and on track for their worst daily performance since October, according to FactSet data, at last check.

The U.S. stock market was broadly faring better - with the Dow Jones Industrial Average DJIA down 0.2%, the S&P 500 SPX slipping 0.1% and the technology-heavy Nasdaq Composite COMP about flat, FactSet data show, at last check.

Airline stocks were falling Wednesday after JetBlue Airways Corp. $(JBLU)$ warned about pressure on its 2024 revenue, and as investors considered a new regulation from the Biden administration that aims to make airlines provide automatic cash refunds to passengers who are owed compensation for circumstances such as canceled flights.

See: Airlines to give automatic cash refunds to flyers under new Biden regulation

Transportation stocks were under pressure as corporate-earnings results continued to roll out for the first quarter.

All of the iShares U.S. Transportation ETF's top 10 holdings as of April 23 were trading lower Wednesday afternoon, including ride-hailing company Uber Technologies Inc. $(UBER)$, railroad company Union Pacific Corp. $(UNP)$, Delta Air Lines Inc. $(DAL)$, and shipping giants United Parcel Service Inc. $(UPS)$ and FedEx Corp. $(FDX)$, according to data on BlackRock's website.

Trucker Old Dominion Freight Line Inc. (ODFL), rail companies Norfolk Southern Corp. $(NSC)$ and CSX Corp. $(CSX)$, and airline companies United Airlines Holdings Inc. $(UAL)$ and Southwest Airlines Co. $(LUV)$ rounded out the ETF's 10 largest exposures as of April 23.

Shares of Delta were down 2.6% Wednesday afternoon, while United Airlines fell 2.7%, Southwest shed 0.8% and JetBlue slumped 3.8%, according to FactSet data, at last check. JetBlue was also held by the iShares U.S. Transportation ETF as recently as April 23, but the airline wasn't among its top 10 weights.

Meanwhile, Old Dominion was down more than 10% on Wednesday afternoon, the worst-performing stock in the S&P 500, according to FactSet data, at last check. Shares of the company were down after it announced quarterly earnings results that missed analysts' consensus revenue estimates, FactSet data show.

The iShares U.S. Transportation ETF's large drop Wednesday has left the fund's shares down slightly for the year and lagging the broader U.S. stock market, FactSet data show, at last check. The S&P 500 was up more than 6% this year based on Wednesday afternoon trading.

-Christine Idzelis

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April 24, 2024 15:40 ET (19:40 GMT)

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