Markets slump as Fed holds rates steady YRC shares slip again in an overall down market

Meanwhile, another downbeat assessment of the trucking industry sends YRC sliding.


YRC Worldwide Inc. shares hit another slick spot on Wall Street, dropping more than 2.5 percent Tuesday after yet another analyst painted a gloomy picture for the trucking sector.

Bear Stearns analyst Edward Wolfe wrote that the nation’s industrial slowdown will cause many truckers to miss Wall Street earnings estimates by more than 5 percent in the fourth quarter.

Wolfe maintained an “underperform” ranking on YRC Worldwide shares and those of competing less-than-truckload carriers Arkansas Best, Old Dominion Freight Line and Con-Way.

In above-average trading on the Nasdaq Stock Market, YRC shares were down $1.09, or 2.76 percent, at $38.38. Shares had fallen in the previous two sessions after three analysts downgraded shares Friday and a fourth cut his earnings estimate Monday.

Overall, stocks slumped as the Federal Reserve’s Open Market Committee kept short-term interest rates steady for a fourth consecutive meeting at 5.25 percent.

The Dow Jones industrial average dropped 12.90 points, or 0.10 percent, and closed at 12,315.58 after having been down as much as 76 points. The Standard & Poor’s 500 index slipped 1.48, or 0.10 percent, and closed at 1,411.56. The Nasdaq composite index was down 11.26 points, or 0.46 percent, and closed at 2,431.60.

Although the Fed left rates unchanged, investors grappled with the central bank’s economic assessment, which warned yet again of inflation risks and reported a substantial slowing of the housing sector. The statement left open the possibility that the central bank might raise rates if inflation accelerates. That disappointed some investors who were hoping for signs that the Fed was moving toward cutting rates.

Overall, the statement indicated to market participants that the Fed wants to keep rates steady for as long it can, analysts said.

“They’re trying to talk tough in the hopes of not having to act tougher,” Jack Caffrey, equities strategist at J.P. Morgan Private Bank, told The Associated Press.