- Kansas City Southern, Americo may expand railroad’s offices at 12th and Broadway – Kansas City Business Journal The Business Journals
- Approval of railroad merger ‘a big, big day’ for Baton Rouge to New Orleans passenger rail The Advocate
- CPKC’s first new trains will handle cross-border perishables shipments TRAINS Magazine
- Kansas City will gain some relocations, lose some jobs due to KC Southern, Canadian Pacific merger – Kansas City Business Journal The Business Journals
- Historic railway merger means more rail traffic in Dubuque; some residents unhappy kwwl.com
- View Full Coverage on Google News
Tag Archives: Railroads
Biden administration presses unions, railroads to avoid shutdown
The United States Chamber of Commerce building is seen in Washington, D.C., U.S., May 10, 2021. REUTERS/Andrew Kelly
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WASHINGTON/LOS ANGELES, Sept 12 (Reuters) – The Biden administration urged railroads and unions to reach a deal to avoid a railroad work stoppage, saying on Monday it would pose “an unacceptable outcome” to the U.S. economy that could cost $2 billion a day.
Railroads, including Union Pacific (UNP.N), Berkshire Hathaway’s (BRKa.N) BNSF, CSX (CSX.O), and Norfolk Southern, have until a minute after midnight on Friday to reach tentative deals with hold out unions representing about 60,000 workers. Failing to do so opens the door to union strikes, employer lockouts and congressional intervention. read more
U.S. Labor Secretary Marty Walsh is postponing travel to Ireland to remain in talks, the department said Monday.
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“The parties continue to negotiate, and last night Secretary Walsh again engaged to push the parties to reach a resolution that averts any shutdown of our rail system,” a Labor Department spokesperson said. “All parties need to stay at the table, bargain in good faith to resolve outstanding issues, and come to an agreement.”
The brinkmanship comes at a sensitive time for unions, railroads, shippers, consumers and President Joe Biden, who appointed an emergency board to help break the impasse.
A White House official told Reuters Biden has been in touch today with unions and companies to try to avert a strike, as have cabinet officials.
U.S. railroads account for almost 30% of cargo transport by weight and maintain about 97% of the tracks Amtrak uses for commuter rail. Widespread railroad disruptions could choke supplies of food and fuel, spawn transportation chaos and stoke inflation. read more
Unions, which won significant pay increases, are pushing back on work rules that would require employees to be on-call and available to work most days. Railroads are struggling to rebuild employee ranks after slashing their workforce by almost 30% over the past six years.
At midday on Wednesday, Norfolk Southern will stop accepting intermodal cargo: goods that move by combinations of ship, truck and rail transport. Those shipments include consumer products and e-commerce packages that account for almost half of U.S. rail traffic.
That could exacerbate existing backups at East Coast seaports and inland hubs, causing cascading delays across the country as farmers prepare for harvest and retailers restock stores for the Christmas shopping season. Bulk commodities – including food, energy, automotive and construction products – make up the remainder of U.S. rail shipments.
U.S. industry groups are pressuring Congress to avert the worst-case scenario.
“A shutdown of the nation’s rail service would have enormous national consequences,” the Chamber said on Monday, adding it would lead to perishable food waste, disrupt goods delivery and prevent heating fuel and chemicals transport.
The Labor Department said there have been dozens of calls by Cabinet officials and other top administration officials to help the sides reach agreement.
Railroads late last week said they would cease shipments of hazardous materials such as chlorine used to purify drinking water and chemicals used in fertilizer on Monday so they are not stranded in unsafe locations if rail traffic stops. read more
On Sunday, two unions negotiating contracts said halting hazardous shipments was designed to give employers leverage ahead of this week’s deadline to secure labor agreements. read more
As of Sunday, eight of 12 unions had reached tentative deals covering about half of 115,000 workers, the National Railway Labor Conference (NRLC) said.
Hold outs include the transportation division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) and the Brotherhood of Locomotive Engineers and Trainmen (BLET).
There has not been a nationwide U.S. rail service stoppage since 1992, when major freight railroads closed operations for two days in response to an International Association of Machinists strike against CSX, saying that a strike against one railroad was a strike against all railroads.
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Reporting by David Shepardson and Lisa Baertlein; Editing by Chizu Nomiyama, Jonathan Oatis and Josie Kao
Our Standards: The Thomson Reuters Trust Principles.
Stock Market Today: Dow Rose as Moderna Slumped Again
The
Dow Jones Industrial Average
had one of its best days this year on Monday, as value and defensive stocks led a rebound from last week’s market declines.
The news Monday was relatively positive, with signs that the Omicron variant of Covid-19 might be less severe than earlier strains and reports that China is considering easing monetary policy. On the Federal Reserve policy front, the latest reporting suggested that the central bank could announce plans at its next meeting to more quickly pull back from its bond-buying program.
The Dow surged 647 points, or 1.9%, for its best one-day point gain since November 2020 and the largest percentage increase since last March. The
S&P 500
closed up 1.2% and the Nasdaq Composite rose 0.9%, while the small-cap
Russell 2000
gained 2.1%, for its fourth-straight daily move of 2% or more.
Post-pandemic reopening stocks were among the biggest gainers on Monday. The
U.S. Global Jets
exchange-traded fund (ticker: JETS) added 5.3%, as
American Airlines Group
(AAL) added 7.9% and
United Airlines Holdings
(UAL) jumped 8.3%. Cruise lines
Carnival
(CCL) and
Royal Caribbean Cruises
(RCL) surged 8.0% and 8.3%, respectively.
Marriott International
(MAR) added 4.5%,
Live Nation Entertainment
(LYV) rose 6.1%, and
Cinemark Holdings
(CNK) gained 7.7%.
S&P 500 value stocks as a group gained 1.4% on Monday, versus a 0.9% rise for growth stocks in the index.
Investor attention remains focused on the newly discovered Omicron variant of coronavirus, news of which recently brought about the Dow’s worst day of the year and saw volatility rock markets last week. The latest headline driving sentiment comes from South Africa, where data—though from a small sample size—suggest that symptoms caused by Omicron were milder than with other variants.
Investors aren’t out of the woods yet, however. The broad market will remain sensitive to daily headlines about Omicron—both good and bad.
“It still feels like we’re in the guesswork stage of working out what the impact of Omicron will be,” said Russ Mould, an analyst at broker AJ Bell. “It would be naive to rule out further volatility as markets attempt to work out exactly what’s going on.”
On Monday, the news was positive and investors bought the market. All 11 S&P 500 sectors closed in the green.
Fed policy has been pushing investor sentiment the other way. Chair Jerome Powell indicated last week that the central bank would consider speeding up its slowing, or tapering, of monthly asset purchases, which add liquidity to markets, amid higher inflation.
“We’re really at a fascinating crossroads in markets at the moment,” said Jim Reid, a strategist at Deutsche Bank. “The market sentiment on the virus and the policy makers at the Fed are moving in opposite directions.”
Those trends mean different things for different kinds of stocks and indexes.
If Omicron is less severe than feared, then the economy might hold up better than expected. That would be good for economically-sensitive cyclical stocks, like many of those in the Dow. Higher bond yields and interest rates, however, can put downward pressure on stock valuations, particularly those with nosebleed price-to-earnings ratios, many of which are found in the Nasdaq.
“Like Friday, how the Nasdaq trades will likely determine the day, as markets want to see the tech sector stabilize after intense weakness late last week,” wrote the Sevens Report’s Tom Essaye. “If the Nasdaq can stabilize, the broad market can bounce.”
The tech-heavy index bounced from a loss of about 1% shortly after Monday’s opening bell.
In the commodity space, oil prices rose Monday after Saudi Arabia raised its January prices for Asian and U.S. customers over the weekend by $0.60, in a sign of firmer demand expectations.
Futures contracts for the international oil benchmark Brent rose 4.6%, to above $73 a barrel, with U.S. futures for West Texas Intermediate crude up 4.9% to about $69.50 a barrel.
“Given that OPEC+ is proceeding with its planned 400,000 barrels per day increase this month, it appears that Saudi Arabia is taking a punt that Omicron is a virus in a teacup,” said Jeffrey Halley, an analyst at broker Oanda. “Saudi Arabia’s confidence, along with the South African Omicron article over the weekend, is a boost to markets looking for good news in any corner they can find it.”
Cryptocurrency markets remained depressed after digital assets took a tumble over the weekend.
Bitcoin
and
Ether,
the two leading cryptos, remained off their lows following the stark fall Saturday, but were slipping after steadying Sunday. Bitcoin was trading hands around $49,000—down from more than $57,000 as recently as Friday—with Ether holding above $4,000.
Here are several stocks on the move Monday:
Nvidia
(ticker: NVDA) was among the most actively traded stocks in the U.S. Monday, closing down about 2.1%. Shares of fellow semiconductor firm Advanced Micro Devices (AMD) lost 3.4%.
Lucid Group
(LCID) stock dropped 5.1% after the electric-vehicle startup revealed that it had received a subpoena from the Securities and Exchange Commission, without offering many details.
Kohl’s
(KSS) gained 5.4% after an activist investor said it should explore selling itself.
Moderna
(MRNA) fell 13.5% after its president said that the risk that vaccines don’t work as well against Omicron is high. Pfizer (PFE) stock slid more than 5%.
Alibaba Group Holding (BABA) stock closed up 10.4% after a management shakeup at the e-commerce giant.
Deutsche Bank
(DB) rose 3.6% after JPMorgan upgraded the bank to Overweight from Neutral, adding that the group shows positive revenue developments in key divisions.
Pharma giant
Roche
(ROG.Switzerland) rose 1.5% in Zurich after announcing that it would release rapid antigen tests for Covid-19 and flu viruses next month.
Food delivery group
Just Eat Takeaway.com
(JET.U.K.) fell 4.9% in London following a price target cut and downgrade to Market Perform from Outperform by Bernstein, which sees few positive catalysts in the pipeline for the company.
Write to Jack Denton at jack.denton@dowjones.com
Canadian Pacific Plans New, Higher Bid for Kansas City Southern
Canadian Pacific Railway Ltd. is planning to make a new, increased offer for Kansas City Southern , according to people familiar with the matter, reigniting a takeover battle with Canadian National Railway Co. for the coveted U.S. railroad.
Canadian Pacific’s board of directors met Monday to authorize a bid that values Kansas City Southern near $300 a share, the people said, or about $27 billion. There is no guarantee Canadian Pacific will follow through with the plan; if it does, it is expected to do so soon.
Kansas City Southern is the smallest of the nation’s major freight railroads. The company plays a big role in U.S.-Mexico trade, with a network stretching across both countries and contributing to its desirability as an acquisition target. Railroad takeovers are rare as regulators tend to view them warily, but Kansas City Southern is seen as one of the last operators of size that is potentially available for purchase. Its allure has only grown as the U.S. economy recovers from the slowdown triggered by the coronavirus pandemic.
Canadian Pacific had clinched a cash-and-stock deal with Kansas City Southern valued at around $275 a share, or $25 billion. Kansas City Southern later agreed to a sale to Canadian National instead after CN offered about $30 billion (then worth around $320 a share) and Canadian Pacific declined to raise its offer.
Kansas City Southern shares closed Monday at $269.60 apiece and rose 6.5% in after-hours trading after The Wall Street Journal reported on Canadian Pacific’s plans.
Goldman, Morgan Stanley Limit Losses With Fast Sale of Archegos Assets
Goldman Sachs Group Inc. and Morgan Stanley were quick to move large blocks of assets before other large banks that traded with Archegos Capital Management, as the scale of the hedge fund’s losses became apparent, according to people with knowledge of the transactions. The strategy helped limit the U.S. firms’ losses in last week’s epic stock liquidation, they said.
Losses at Archegos, run by former Tiger Asia manager Bill Hwang, have triggered the liquidation in excess of $30 billion in value. Banks were continuing to sell blocks of stocks linked to Archegos Monday, traders said.
“This is a challenging time for the family office of Archegos Capital Management, our partners and employees. All plans are being discussed as Mr. Hwang and the team determine the best path forward,” a company spokeswoman said in a statement Monday evening.
Archegos took big, concentrated positions in companies and held some positions in a mix of stock and swaps. Swaps are a common arrangement in which a trader gets access to the returns generated by a portfolio of shares or other assets in exchange for a fee.
Losses threatened to spill over into the so-called prime brokerage businesses that have been handling the firm’s trading. The group of large Wall Street banks includes Goldman, Morgan, Credit Suisse Group AG, Nomura Holdings Inc., UBS Group AG and Deutsche Bank AG , said people familiar with the firm’s trading.
Railroads Strike a $25 Billion Merger
Canadian Pacific
CP -1.37%
Railway Ltd. agreed to acquire
Kansas City Southern
KSU 0.38%
in a merger valued at about $25 billion that would create the first freight-rail network linking Mexico, the U.S. and Canada.
The companies said Sunday their boards agreed to a deal that values Kansas City at $275 a share in a combination of cash and stock. Kansas City investors will receive 0.489 of a Canadian Pacific share and $90 in cash for each Kansas City common share held.
If approved by regulators, the deal would unite two of the major North American freight carriers, linking factories and ports in Mexico, farms and plants in the midwestern U.S. and Canada’s ocean ports and energy resources.
The combined company would have about $8.7 billion in annual revenue and employ nearly 20,000 people. It would be run by Canadian Pacific CEO
Keith Creel.
Kansas City Southern is the smallest of the five major freight railroads in the U.S. but plays a key role in U.S.-Mexico trade. Its network mainly runs up the length of Mexico through Texas to its namesake city. The company last year rejected takeover bids worth roughly $20 billion from a group of institutional investors seeking to take it private, The Wall Street Journal reported.
Canadian Pacific has long sought a union with Kansas City to extend its reach into its busy freight routes that stretch from Mexico through southern and midwestern U.S. states. CP’s major rail lines run across Canada, some northern U.S. states and south to Chicago.
The Canadian railway’s leader, Mr. Creel, worked closely with former chief
Hunter Harrison,
who made a number of unsuccessful overtures to buy Kansas City. Mr. Harrison died in 2017 after taking over and revamping another U.S. operator,
CSX Corp.
“This will create the first U.S.-Mexico-Canada railroad,” Mr. Creel said in a statement.
Railway mergers face significant regulatory hurdles in the U.S. Under Mr. Harrison, Canadian Pacific abandoned a $30 billion pursuit of
Norfolk Southern Corp.
in 2016 after regulators expressed concern about reduced competition and potential safety issues.
Kansas City and Canadian Pacific currently have a single point where their two networks connect, in a Kansas City, Mo., facility they jointly operate. The merger could allow trains traveling north and south to avoid having to interchange cars and potentially bypass Chicago, a busy and often congested hub in the U.S. freight system.
The merger partners said the proposed combination wouldn’t reduce choice for customers since there is no overlap between their systems. They said the possibility for single-line routes would shift trucks off U.S. highways, reducing congestion and emissions in the Dallas-to-Chicago corridor.
The freight-rail industry suffered a sharp drop in volume last year as the pandemic slowed trade and temporarily shut many U.S. stores, but volume has bounced back as factories continued to operate and economies recovered. Trade volume has overwhelmed some U.S. ports, causing congestion and delays.
Write to Jacquie McNish at Jacquie.McNish@wsj.com
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