The Standard & Poor's 500 Index shed 0.01%, to 1,093.01 and the technology-laden Nasdaq Composite Index slipped 2.98 points, or 0.14%, to close at 2,151.08.  On the New York Stock Exchange, three stocks declined in price for every two that rose.  Volume was light as only 990 million shares exchanged hands.

Record low interest rates and a sliding dollar have helped stocks in recent months as investors have taken their focus away from some of the persistent worries of the economy.  Also, with the Federal Reserve continuing its highly accommodative monetary stance and the G20 finance ministers pledging to keep economic stimulus in place, risk appetites have received a boost lately. 

Of the $81 billion in Treasury auction scheduled for this week, yesterday’s $25 billion sale of 10-year notes witnessed decent demand, following robust demand for the $40 billion in 3-year notes on Monday. Bond markets are closed today for Veterans Day.

Shipping company FedEx Corp. (FDX) yesterday said it expects to ship more than 13 million packages on December 14, its busiest shipping day of the year.  United Parcel Service Inc (NYSE:UPS) said it sees growth in its volumes next year as the global economy recovers.  American Express (NYSE:AXP) said cardholder spending grew in October, with billing up 3%.

Meanwhile, Bank of America's (NYSE:BAC) Ken Lewis noted his firm is "keeping its head above water" this year.  Bob Toll of Toll Brothers (NYSE:TOL) noted, "Home buyers began to emerge from their bunkers in late March 2009 and the market continued to gain momentum up to Labor Day.  Since then demand has been volatile. This may be due in part to typical seasonality, but the more likely cause is concern about unemployment and the overall economy."

A number of Fed speakers yesterday sung the tone of caution, while mostly agreeing on the fragility of the economic recovery.  Both Lockhart and Yellen warned unemployment rate may remain high for the next several years.  Rosengren warned that with high unemployment levels, the US economy is not yet in a position to warrant exit strategies.  This morning Treasury Secretary Geithner reiterated the importance of the dollar strength for the health of the US economy.

The fund normally invests in financial instruments with economic characteristics that should perform opposite to those of its underlying index. It is non-diversified.

Unit holders have to make a minimum initial investment of $2,500 to enter this Zacks#1 Rank (“Strong Buy") fund. It has outstripped the total returns of its benchmark index in the last 1-, 3- and 5-year periods.

Rydex Transportation Inv (RYPIX) seeks capital appreciation by investing in companies engaged in providing transportation services or those engaged in design, manufacture, distribution, or sale of transportation equipment.

The fund invests in securities that are traded in the United States, as well as in futures and options contracts. It has an expense ratio of 1.38%.

The fund’s key holdings include United Parcel Service Inc. (UPS - Analyst Report), Union Pacific Corp. (UNP - Analyst Report) and Burlington Northern Santa Fe Corp. (BNI - Analyst Report).

Rydex Electronics Inv (RYSIX) seeks capital appreciation. It primarily invests in equity securities that are traded in the United States, as well as in futures and options contracts.

The fund focuses on electronics companies, including semiconductor manufacturers and distributions, and makers and vendors of other electronic components and devices. It distributes dividends and capital gains, if any, annually.

Michael P. Byrum has been lead manager at the fund since its inception in April 1998. Before joining Rydex Investments, Byrum worked for Money Management Associates, the investment adviser for Rushmore Funds Inc.

Chicago, IL – September 14, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: FedEx Corp. (FDX), United Parcel Service Inc. (SNDA), UBS AG (UBS), Moody’s Corp. (MCO) and McGraw-Hill (MHP).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

FedEx Preannouncement Beats

Shares of FedEx Corp. (FDX) have jumped more than 5% so far today after the company preannounced fiscal first-quarter earnings, which topped Wall Street expectations.

The package-delivery major said that it expects to post earnings of 58 cents per share, which is well above its guidance of 30 cents to 45 cents as well as the Zacks Consensus Estimate of 43 cents per share. The company reported earnings of $1.23 per share in the year-ago quarter.

The Memphis, TN-based company also stated that fiscal second-quarter earnings is expected to range between 65 cents and 95 cents per share, which is in line with the Zacks Consensus Estimate of 71 cents per share derived from 15 covering analysts. The guidance is still well below the year-ago earnings of $1.58 per share.

FedEx attributed the better-than-expected first quarter earnings to improved International Priority (IP) shipping volumes and management’s cost cutting efforts. The IP service generated revenues of nearly $7 billion and contributed about 19.6% towards total revenue during fiscal 2009.

However, the company added that revenue per shipment dipped year over year in each of the transportation segments amid a competitive pricing environment coupled with significant overcapacity in less-than-truckload (LTL) freight market. The company, which competes with United Parcel Service Inc. (SNDA), also said that the second quarter guidance incorporates the current outlook on fuel prices and a modest recovery in global economic conditions.

Moody's Under SEC Axe

Swiss banking giant UBS AG (UBS) was recently ordered to pledge its assets or provide bonds worth $35 million by Judge John Blawie at Connecticut Superior Court. The unfavorable order came as a blow after reports claimed that top credit ratings agencies had committed a securities fraud by providing insider trading information to the bank.

Stanford-based hedge fund Pursuit Partners claimed that UBS had entered a deal to sell its investment-grade collateralized debt obligation (CDO) notes in 2007 with the prior knowledge that the securities were about to be downgraded.

The proceedings revealed that the rating agencies Moody’s Corp. (MCO) and Standard & Poor's provided insider information to UBS regarding their impending decision to downgrade some of the CDOs the bank was selling. The credit crunch led the securities to default only months after they were sold and UBS used the situation to its advantage.

The Court order came at the end of a one-week hearing, where various UBS employees testified and related documents, including internal UBS e-mails, were reviewed. However, UBS pledged innocence saying that the Court’s decision was a routine procedure, requiring defendants to provide security during the case proceedings.

The UBS litigation reflects a negative sentiment that has built up against large credit rating agencies for sharing furtive connections with big investment banks. This would certainly hurt Moody’s goodwill and highlight the fact that rating agencies can be bought. The integrity of the company and its ratings are in question.

Moody’s allegedly hastened the credit crisis earlier in the decade by assigning top ratings to mortgage-backed securities that deteriorated later. Moreover, it is being probed by regulators worldwide, with several ongoing reviews in Europe for rating a European debt product, constant proportion debt obligations (CPDOs), at a higher-than-merited AAA.

The SEC has designed various measures to stop the practice of corporations seeking to buy favorable ratings by negotiating fees with raters. Although Moody’s is not ultimately compensated on the accuracy of its ratings, we believe it will face large penalties similar to investment banks in the wake of the technology bubble earlier in the decade.

The SEC is expected to hold a meeting on Sept. 17 to vote on proposed rules for credit rating agencies and pose restrictions on controversial flash orders. Regulators will also vote on the subject on adopting previously proposed rules to improve credit rating practices. The major credit rating agencies under the scrutiny would be Moody's, McGraw-Hill (MHP), Standard & Poor's and Fitch Ratings.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Chicago, IL – July 24, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: WESCO International (WCC), Anixter International (AXE), W.W. Grainger (GWW), United Parcel Service, Inc. (UPS) and Hershey (HSY).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Thursday’s Analyst Blog:

WESCO Misses, Guidance Down

WESCO International (WCC) announced second-quarter results that missed the consensus revenue estimate by 15.5% and the EPS estimate by 12 cents. Results appear weaker than the peer group, which includes Anixter International (AXE), W.W. Grainger (GWW) and privately-held Graybar Electric.

Revenue of $1.16 billion was down 1.7% sequentially and 27% year over year. Excluding the impact of currency, revenue was down 25.4%. The sequential decline was due to seasonality and the impact of the recession. Lower commodity prices (especially copper and steel) were responsible for 30% of the year-over-year decline. Recession-related weakness accounted for the rest. Revenue per employee declined around 18% from the year-ago period, but was up 2.8% sequentially.

UPS: Revenues Fall

Today, United Parcel Service, Inc. (UPS) posted diluted EPS of 49 cents per share before non-operating items, down 44% year over year, from 85 cents per share earned a year ago. The results matched the consensus estimate, but were below our 51-cent estimate due to lower-than-expected revenues.

Revenues dropped 17% to $10.8 billion from $13.0 billion in the prior-year-quarter and compare to a consensus estimate of $11.02 billion and our estimate of $11.18 billion. Reflecting the global economic slump, consolidated volume declined 4.7% to 914 million, while average revenue per piece fell 10.5% to $9.78, due to lower fuel surcharge revenues, a reduction in package weights, and the negative impact of currency.

Hershey Stuns; Raises Guidance

Hershey (HSY) reported robust results for the second quarter of 2009 and beat consensus by $0.08. Quarterly earnings (excluding the impact of unusual charges) were $0.43 per diluted share, up a strong 48.3% from $0.29 reported in the year-ago quarter.

Net sales increased 5.9% year-over-year to $1.17 billion driven by favorable pricing and international sales growth, which were partially offset by volume declines associated with pricing elasticity and unfavorable foreign exchange. Further, management stated that core brands such as Kisses are responding to the investments in advertising, in-store programming and merchandising. The Easter season and the kick-off of the annual S’mores promotion contributed positively to the top-line. In the channels measured by syndicated data, U.S. market share during the second quarter as well as year-to-date periods increased 0.5 points.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Chicago, IL – July 22, 2009 – Zacks.com announces the latest Industry Outlook. Today’s outlook from Zacks Equity Research analyst Ann Heffron discusses the Transportation sector. Highlighted stocks include: United Parcel Service, Inc. (UPS), FedEx Corporation (FDX) and CSX Corporation (CSX).

Stock performance in the transportation sector has been very uneven, reflecting the varying fortunes of particular industries within the sector. The median year-to-date-stock price gain/(loss) has been mixed for industries in the Zacks transportation universe, with all industries underperforming the S&P 500’s 3.3% increase, with the exception of railroads and air freight.

Air freight has been helped by large gains in smaller companies as the giants within the air freight sector, United Parcel Service, Inc. (UPS) and FedEx Corporation (FDX), are down 10.6% and 8.4% year to date, respectively. The railroads were helped when CSX Corporation (CSX) kicked off the second quarter earnings season earlier this week with better-than-expected earnings.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5510.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5511.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

• Railroads 11.8%
• Air Freight 5.1%
• Equip & Leasing (2.1)%
• Trucking (2.5)%
• Shipping (2.8)%
• Airlines (29.5)%

• Volume weakness - as the global recession takes hold, we expect volumes to weaken from current levels as fewer businesses ship goods, whether by air, sea, rail, or road, and fewer individuals decide to travel, which will hurt airlines
• Waning pricing power - to date, pricing has been fairly solid, particularly in those industries that are able to pass through rising fuel costs through fuel surcharges, such as railroads and trucking. Airlines have managed to add revenues through surcharges for second bags and other items. However, as the recession takes hold, we expect revenues to come under pressure, due to competitive pressures as companies fight for a share of a smaller pie
• Falling fuel prices - declining fuel prices, a significant line item on income statements for many transportation companies, should help alleviate cost pressures; on the negative side, this will hurt revenues as fuel surcharge revenue recedes

Moreover, many dry bulk shippers in the Zacks-covered universe have been successful in negotiating waivers in financial covenants contained within loan agreements, thereby providing some much-needed breathing room to operate in this downturn. That said, dry bulk shippers are not out of the woods yet, and will need to see a sustained uptick in global trade patterns before normal operating trends can be achieved.

OPPORTUNITIES

WEAKNESSES

Specific Sell recommendations include Overseas Shipholding Group, Inc. (OSG), the second largest publicly listed oil tanker owner in the world, and China Eastern Airlines Corporation Limited (CEA), one of the 3 largest airliners in China by fleet size and the primary air carrier serving Shanghai.

There is one company -- DryShips Inc. (DRYS) -- in the covered transportation universe that has a Zacks Rank of 5 (Strong Sell) and six companies -- Excel Maritime Carriers Ltd (EXM), FedEx Corporation, Overseas Shipholding Group, Inc., Star Bulk Carriers Corp. (SBLK), UAL Corporation (UAUA) and Union Pacific Corporation (UNP) -- that have a Zacks Rank of 4 (Sell).Zacks Investment Research

• Railroads 11.8%
• Air Freight 5.1%
• Equip & Leasing (2.1)%
• Trucking (2.5)%
• Shipping (2.8)%
• Airlines (29.5)%

• Volume weakness - as the global recession takes hold, we expect volumes to weaken from current levels as fewer businesses ship goods, whether by air, sea, rail, or road, and fewer individuals decide to travel, which will hurt airlines
• Waning pricing power - to date, pricing has been fairly solid, particularly in those industries that are able to pass through rising fuel costs through fuel surcharges, such as railroads and trucking. Airlines have managed to add revenues through surcharges for second bags and other items. However, as the recession takes hold, we expect revenues to come under pressure, due to competitive pressures as companies fight for a share of a smaller pie
• Falling fuel prices - declining fuel prices, a significant line item on income statements for many transportation companies, should help alleviate cost pressures; on the negative side, this will hurt revenues as fuel surcharge revenue recedes

Moreover, many dry bulk shippers in the Zacks-covered universe have been successful in negotiating waivers in financial covenants contained within loan agreements, thereby providing some much-needed breathing room to operate in this downturn. That said, dry bulk shippers are not out of the woods yet, and will need to see a sustained uptick in global trade patterns before normal operating trends can be achieved.

OPPORTUNITIES

WEAKNESSES

Specific Sell recommendations include Overseas Shipholding Group, Inc. (OSG), the second largest publicly listed oil tanker owner in the world, and China Eastern Airlines Corporation Limited (CEA), one of the 3 largest airliners in China by fleet size and the primary air carrier serving Shanghai.

There is one company -- DryShips Inc. (DRYS) -- in the covered transportation universe that has a Zacks Rank of 5 (Strong Sell) and six companies -- Excel Maritime Carriers Ltd (EXM), FedEx Corporation, Overseas Shipholding Group, Inc., Star Bulk Carriers Corp. (SBLK), UAL Corporation (UAUA) and Union Pacific Corporation (UNP) -- that have a Zacks Rank of 4 (Sell).Zacks Investment Research

Air freight has been helped by large gains in smaller companies as the giants within the air freight sector, United Parcel Service, Inc. (UPS) and FedEx Corporation (FDX), are down 10.6% and 8.4% year to date, respectively. The railroads were helped when CSX Corporation (CSX) kicked off the second quarter earnings season earlier this week with better-than-expected earnings.

• Railroads 11.8%
• Air Freight 5.1%
• Equip & Leasing (2.1)%
• Trucking (2.5)%
• Shipping (2.8)%
• Airlines (29.5)%

• Volume weakness - as the global recession takes hold, we expect volumes to weaken from current levels as fewer businesses ship goods, whether by air, sea, rail, or road, and fewer individuals decide to travel, which will hurt airlines
• Waning pricing power - to date, pricing has been fairly solid, particularly in those industries that are able to pass through rising fuel costs through fuel surcharges, such as railroads and trucking. Airlines have managed to add revenues through surcharges for second bags and other items. However, as the recession takes hold, we expect revenues to come under pressure, due to competitive pressures as companies fight for a share of a smaller pie
• Falling fuel prices - declining fuel prices, a significant line item on income statements for many transportation companies, should help alleviate cost pressures; on the negative side, this will hurt revenues as fuel surcharge revenue recedes

Moreover, many dry bulk shippers in the Zacks-covered universe have been successful in negotiating waivers in financial covenants contained within loan agreements, thereby providing some much-needed breathing room to operate in this downturn. That said, dry bulk shippers are not out of the woods yet, and will need to see a sustained uptick in global trade patterns before normal operating trends can be achieved.

OPPORTUNITIES

At this time, we see no near-term opportunities in this space. There are currently no stocks in the covered transportation universe with a Zacks ranking of 1 (Strong Buy) and only one company -- Euroseas Ltd. (ESEA) -- that has a Zacks rank of 2 (Buy).

WEAKNESSES

We would avoid companies that are in very volatile industries, such as shipping and airlines. Stock prices in these industries can display enormous gains and losses on a frequent basis and are not for the faint of heart.

Specific Sell recommendations include Overseas Shipholding Group, Inc. (OSG), the second largest publicly listed oil tanker owner in the world, and China Eastern Airlines Corporation Limited (CEA), one of the 3 largest airliners in China by fleet size and the primary air carrier serving Shanghai.

There is one company -- DryShips Inc. (DRYS) -- in the covered transportation universe that has a Zacks Rank of 5 (Strong Sell) and six companies -- Excel Maritime Carriers Ltd (EXM), FedEx Corporation (FDX), Overseas Shipholding Group, Inc. (OSG), Star Bulk Carriers Corp. (SBLK), UAL Corporation (UAUA) and Union Pacific Corporation (UNP) -- that have a Zacks Rank of 4 (Sell).

• Air Freight 17.3%
• Equipment & Leasing 0.5%
• Trucking (0.7)%
• Shipping (0.9)%
• Railroads (3.8)%
• Airlines (32.8)%

• Volume weakness - as the global recession takes hold, we expect volumes to weaken from current levels as fewer businesses ship goods, whether by air, sea, rail or road, and fewer individuals decide to travel, which will hurt airlines
• Waning pricing power - to date, pricing has been fairly solid, particularly in those industries that are able to pass through rising fuel costs through fuel surcharges, such as railroads and trucking. Airlines have managed to add revenues through surcharges for second bags and other items. However, as the recession takes hold, we expect revenues to come under pressure, due to competitive pressures as companies fight for a share of a smaller pie
• Falling fuel prices - declining fuel prices, a significant line item on income statements for many transportation companies, should help alleviate cost pressures; on the negative side, this will hurt revenues as fuel surcharge revenue recedes

Moreover, many dry bulk shippers in the Zacks-covered universe have been successful in negotiating waivers in financial covenants contained within loan agreements, thereby providing some much-needed breathing room to operate in this downturn. That said, dry bulk shippers are not out of the woods yet, and will need to see a sustained uptick in global trade patterns before normal operating trends can be achieved.

OPPORTUNITIES

WEAKNESSES

Specific Sell recommendations include Overseas Shipholding Group, Inc. (OSG), the second largest publicly listed oil tanker owner in the world, and China Eastern Airlines Corporation Limited (CEA), one of the 3 largest airliners in China by fleet size and the primary air carrier serving Shanghai.

There are two companies -- DryShips Inc. (DRYS) and Norfolk Southern Corporation (NSC)-- in the covered transportation universe that have a Zacks Rank of 5, and five companies -- CAI International, Inc. (CAP), Canadian Pacific Railway Limited (CP), FedEx Corporation (FDX), Overseas Shipholding Group, Inc. (OSG) and United Parcel Service, Inc. (UPS) -- that have a Zacks Rank of 4, indicating near-term selling pressure on the share price.Zacks Investment Research

• Air Freight 17.3%
• Equipment & Leasing 0.5%
• Trucking (0.7)%
• Shipping (0.9)%
• Railroads (3.8)%
• Airlines (32.8)%

• Volume weakness - as the global recession takes hold, we expect volumes to weaken from current levels as fewer businesses ship goods, whether by air, sea, rail or road, and fewer individuals decide to travel, which will hurt airlines
• Waning pricing power - to date, pricing has been fairly solid, particularly in those industries that are able to pass through rising fuel costs through fuel surcharges, such as railroads and trucking. Airlines have managed to add revenues through surcharges for second bags and other items. However, as the recession takes hold, we expect revenues to come under pressure, due to competitive pressures as companies fight for a share of a smaller pie
• Falling fuel prices - declining fuel prices, a significant line item on income statements for many transportation companies, should help alleviate cost pressures; on the negative side, this will hurt revenues as fuel surcharge revenue recedes

Moreover, many dry bulk shippers in the Zacks-covered universe have been successful in negotiating waivers in financial covenants contained within loan agreements, thereby providing some much-needed breathing room to operate in this downturn. That said, dry bulk shippers are not out of the woods yet, and will need to see a sustained uptick in global trade patterns before normal operating trends can be achieved.

OPPORTUNITIES

WEAKNESSES

Specific Sell recommendations include Overseas Shipholding Group, Inc. (OSG), the second largest publicly listed oil tanker owner in the world, and China Eastern Airlines Corporation Limited (CEA), one of the 3 largest airliners in China by fleet size and the primary air carrier serving Shanghai.

There are two companies -- DryShips Inc. (DRYS) and Norfolk Southern Corporation (NSC)-- in the covered transportation universe that have a Zacks Rank of 5, and five companies -- CAI International, Inc. (CAP), Canadian Pacific Railway Limited (CP), FedEx Corporation (FDX), Overseas Shipholding Group, Inc. (OSG) and United Parcel Service, Inc. (UPS) -- that have a Zacks Rank of 4, indicating near-term selling pressure on the share price.Zacks Investment Research

• Air Freight 17.3%
• Equipment & Leasing 0.5%
• Trucking (0.7)%
• Shipping (0.9)%
• Railroads (3.8)%
• Airlines (32.8)%

• Volume weakness - as the global recession takes hold, we expect volumes to weaken from current levels as fewer businesses ship goods, whether by air, sea, rail or road, and fewer individuals decide to travel, which will hurt airlines
• Waning pricing power - to date, pricing has been fairly solid, particularly in those industries that are able to pass through rising fuel costs through fuel surcharges, such as railroads and trucking. Airlines have managed to add revenues through surcharges for second bags and other items. However, as the recession takes hold, we expect revenues to come under pressure, due to competitive pressures as companies fight for a share of a smaller pie
• Falling fuel prices - declining fuel prices, a significant line item on income statements for many transportation companies, should help alleviate cost pressures; on the negative side, this will hurt revenues as fuel surcharge revenue recedes

Moreover, many dry bulk shippers in the Zacks-covered universe have been successful in negotiating waivers in financial covenants contained within loan agreements, thereby providing some much-needed breathing room to operate in this downturn. That said, dry bulk shippers are not out of the woods yet, and will need to see a sustained uptick in global trade patterns before normal operating trends can be achieved.

OPPORTUNITIES

At this time, we see no near-term opportunities in this space. There are currently no stocks with Zacks ranking of 1 or 2 -- indicating upward bias in the share price over the near term -- in the covered transportation universe.

WEAKNESSES

We would avoid companies that are in very volatile industries, such as shipping and airlines. Stock prices in these industries can display enormous gains and losses on a frequent basis, and are not for the faint of heart.

Specific Sell recommendations include Overseas Shipholding Group, Inc. (OSG), the second largest publicly listed oil tanker owner in the world, and China Eastern Airlines Corporation Limited (CEA), one of the 3 largest airliners in China by fleet size and the primary air carrier serving Shanghai.

There are two companies -- DryShips Inc. (DRYS) and Norfolk Southern Corporation (NSC) -- in the covered transportation universe that have a Zacks Rank of 5, and five companies -- CAI International, Inc. (CAP), Canadian Pacific Railway Limited (CP), FedEx Corporation (FDX), Overseas Shipholding Group, Inc. (OSG) and United Parcel Service, Inc. (UPS) -- that have a Zacks Rank of 4, indicating near-term selling pressure on the share price.

• Aegean Marine Petroleum Network Inc (ANW)
• AeroVironment Inc (AVAV)
• Albany International Corp (AIN)
• BancTrust Financial Group Inc (BTFG)
• Build-A-Bear Workshop Inc (BBW)
• C&D Technologies Inc (CHP)
• CARBO Ceramics Inc (CRR)
• Care Investment Trust Inc (CRE)
• China Security & Surveillance Tech Inc (CSR)
• CNOOC Ltd (CEO)
• CoBiz Financial Inc (COBZ)
• Coleman Cable Inc (CCIX)
• Collective Brands Inc (PSS)
• CRH Plc (CRH)
• Cumulus Media Inc (CMLS)
• Cybex International Inc (CYBI)
• Dayton Superior Corp (DSUPQ)
• DCP Midstream Partners LP (DPM)
• Employers Holdings Inc (EIG)
• Entravision Communication (EVC)
• Exterran Holdings Inc (EXH)
• Foundation Coal Holdings Inc (FCL)
• Fresh Del Monte Produce Inc (FDP)
• Frontline Ltd (FRO)
• G&K Services Inc (GKSR)
• Gladstone Capital Corp (GLAD)
• Harsco Corp (HSC)
• Headwaters Inc (HW)
• Heritage Financial Corp (HFWA)
• HFF Inc (HF)
• Hypercom Corp (HYC)
• Ixia (XXIA)
• Jones Lang LaSalle Inc (JLL)
• K-Sea Transportation Partners LP (KSP)
• Kingsway Financial Services Inc (KFS)
• Mercantile Bank Corp (MBWM)
• MetLife Inc (MET)
• Metso Oyj (MXCYY)
• Nara Bancorp Inc (NARA)
• NetScout Systems Inc (NTCT)
• ORBCOMM Inc (ORBC)
• Pacific Capital Bancorp (PCBC)
• Parkway Properties Inc (PKY)
• Penn Virginia GP Holdings LP (PVG)
• Perdigao SA (PDA)
• Republic Bancorp Inc KY (RBCAA)
• RRI Energy Inc (RRI)
• Rudolph Technologies Inc (RTEC)
• SeaBright Insurance Holdings Inc (SBX)
• Solarfun Power Holdings Co Ltd (SOLF)
• Summit Financial Group Inc (SMMF)
• T-3 Energy Services Inc (TTES)
• TiVo Inc (TIVO)
• Trailer Bridge Inc (TRBR)
• Tween Brands Inc (TWB)
• US Concrete Inc (RMIX)
• United Parcel Service Inc (UPS)
• Vital Images Inc (VTAL)
• WESCO International Inc (WCC)
• Willbros Group Inc (WG)
• TiVo Inc (TIVO)
• Trailer Bridge Inc (TRBR)
• Tween Brands Inc (TWB)
• US Concrete Inc (RMIX)
• United Parcel Service Inc (UPS)
• Vital Images Inc (VTAL)
• WESCO International Inc (WCC)
• Willbros Group Inc (WG) 
  
  
  View the entire Zacks #5 Rank List.

• AmericanWest Bancorp (AWBC)
• Atlas Energy Resources LLC (ATN)
• Avnet Inc (AVT)
• BGC Partners Inc (BGCP)
• Blyth Inc (BTH)
• The Boeing Co (BA)
• Bristow Group Inc (BRS)
• Brooks Automation Inc (BRKS)
• Carlisle Companies Inc (CSL)
• Cascade Bancorp (CACB)
• Columbia Sportswear Co (COLM)
• Commercial Vehicle Group Inc (CVGI)
• Consol Energy Inc (CNX)
• Cott Corp (COT)
• Danaos Corp (DAC)
• Dayton Superior Corp (DSUP)
• Deere & Co (DE)
• The Walt Disney Co (DIS)
• Echostar Corp (SATS)
• Ensco International Inc (ESV)
• CGG Veritas (CGV)
• Heritage-Crystal Clean Inc (HCCI)
• Hertz Global Holdings Inc (HTZ)
• KVH Industries Inc (KVHI)
• Lazard Ltd (LAZ)
• MB Financial Inc (MBFI)
• Media General Inc (MEG)
• Parke Bancorp Inc (PKBK)
• Penford Corp (PENX)
• Pharmaceutical Product Development Inc (PPDI)
• The PMI Group Inc (PMI)
• Progress Software Corp (PRGS)
• Saia Inc (SAIA)
• SCBT Financial Corp (SCBT)
• Select Comfort Corp (SCSS)
• Semitool Inc (SMTL)
• Simpson Manufacturing Co Inc (SSD)
• Solarfun Power Holdings Co Ltd (SOLF)
• Standard Microsystems Corp (SMSC)
• The Talbots Inc (TLB)
• Unisys Corp (UIS)
• United Parcel Service Inc (UPS)
• WSFS Financial Corp (WSFS)

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Thursday's Analyst Blog:

Coca-Cola Gets Innocent

The Coca-Cola Company (KO) is investing £30 million ($44 million) for a minority stake of between 10% and 20% in Innocent Drinks, a U.K.-based maker of fruit smoothies. Innocent sells about 2 million smoothies a week and will use the proceeds to fund European expansion.

The company currently operates in 13 European countries and has revenues of £100 million ($148 million). In addition, Coca-Cola may be able to help Innocent Drinks distribute its products.

Buy-Rated ACOR Resubmits NDA

This morning, Acorda Therapeutics, Inc. (ACOR) announced it had resubmitted a New Drug Application (NDA) for Fampridine-SR to the U.S. FDA. Fampridine-SR is a novel therapy being developed to improve walking ability in people with multiple sclerosis (MS).

We remind investors that Acorda received a Refuse to File (RTF) letter for the Fampridine-SR NDA on March 30, 2009, which cited the need to correct "format issues" and requested additional supporting information on a fed/fasting study before the NDA could be accepted for review. Acorda management held subsequent discussions with the FDA, and now believes the filing this morning addresses all the outstanding issues with the RTF letter.

Royal Caribbean Up Sharply

Shares of Royal Caribbean (RCL) are trading sharply higher this morning after the company reported first-quarter results that exceeded Street expectations, and issued full-year earnings guidance above the current Street consensus estimate.

At first glance, these appear to be very strong numbers. Even after accounting for the reported upside to first quarter estimates, the company's full-year guidance implies earnings per share for the remainder of the year approximately $0.20 -- greater than the current Street consensus view.

UPS Down After Earnings Posted

Today, United Parcel Service, Inc. (UPS) posted 2009 first quarter diluted EPS of $0.52, down 40% year over year, and below the consensus of $0.56 and our estimate of $0.60, largely reflecting a worse-than expected decline in revenues from the weakening global economy.

Total revenues dropped 14% to $10.9 billion as consolidated average daily volume slumped 3.9% and average revenue per piece decreased 6.9% from changes in product mix, declining fuel surcharges and weight per package, and negative currency translation effects. The company's International Package and Supply Chain & Freight operations were particularly hard hit, with revenues off 19% and 20%, respectively.

Robert Half Facing Challenges

Robert Half International Inc. (RHI) reported first quarter results after the market close yesterday. Quarterly earnings declined 87% year-over-year to $0.06 per diluted share and were $0.02 below expectations.

The company's results are being impacted by global financial crisis, difficult labor markets and weakening economies as the company's clients became more cautious with their hiring actions throughout the quarter. Net operating service revenues declined 32.9% to $823 million with all segments reporting lower revenues.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=2677

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4580.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Among the hardest hit have been the airlines -- whose performance has been hobbled by recent high oil prices -- and shipping, where spot rates have plummeted from recent historical highs and are near 22-year lows. We believe there are a number of countervailing factors that will affect the transportation sector within the coming months:

* Volume weakness -- as the global recession takes hold, we expect volumes to weaken from current levels as fewer businesses ship goods, whether by air, sea, rail, or road, and fewer individuals decide to travel, which will hurt airlines. * Waning pricing power -- to date, pricing has been fairly solid, particularly in those industries that are able to pass through rising fuel costs through fuel surcharges, such as railroads and trucking. Airlines have managed to add revenues through surcharges for second bags and other items. However, as the recession takes hold, we expect revenues to come under pressure, due to competitive pressures as companies fight for a share of a smaller pie. * Falling fuel prices fall -- declining fuel prices, a significant line item on income statements for many transportation companies, should help alleviate cost pressures; on the negative side, this will hurt revenues as fuel surcharge revenue recedes.

In the past few days, several companies have reduced earnings guidance, noting more rapid and greater deterioration than previously expected. FedEx Corporation (FDX) stated that declining demand from significantly weaker global economic conditions in the second half of the year would overwhelm the benefits of falling fuel prices and the departure of DHL from the U.S. domestic package market. Con-way Inc. (CNW) noted that decelerating volumes in the less-than-truckload (LTL) market, combined with pricing pressures and lower fuel surcharges, have significantly curtailed expectations for 2008 earnings. This has played havoc with stock prices with one-day price declines of 14.5% for FDX and 13.9% for CNW.

Moreover, a number of companies in the dry bulk shipping industry have cut dividends to conserve capital. We would not be surprised to see companies in other industries cut payouts as the global recession takes hold.

OPPORTUNITIES

Going forward, we believe that investors will focus on safety and security and believe that large-cap companies with global brand-name recognition will provide some downside protection in a declining market. In this category, we would place United Parcel Service, Inc. (UPS), the world's largest express carrier and package delivery company. Another name we like is CSX Corporation (CSX), a major railroad that operates in 23 eastern states, which we believe is undervalued relative to its growth prospects.

WEAKNESSES

We would avoid companies that are in very volatile industries, such as shipping and airlines, even though shares are pretty beaten up. Stock prices in these industries can display enormous gains and losses on a frequent basis and are not for the faint of heart.

Ann Heffron, CFA is a senior analyst covering the transportation sector for Zacks Equity Research.
"UPS" Free Stock Analysis: Buy? Sell? Hold?
"CNW" Free Stock Analysis: Buy? Sell? Hold?
"CSX" Free Stock Analysis: Buy? Sell? Hold?
"FDX" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

• U.S. job cuts and slashed stateside budgets have forced express mailer DHL Express, a subsidiary of Deutsche Post AG, from the U.S. Market, Reuters reported. With the move, Deutsche Post AG cut 9,500 jobs (on top of 5,400 from earlier this year). It was also an early Christmas present for rivals United Parcel Service Inc. (UPS) and FedEx Corp. (FDX), who’ve also taken their lumps from the slumping U.S. economy.

• Shares moved higher for China infrastructure titans – China Railway Group and Angang Steel Co. –…

UPS reported second quarter diluted EPS of $0.85, in line with earnings guidance provided on June 23. While the weaker U.S. economy, slowing U.S. volume growth, the shift away from premium products, increased fuel costs and higher interest expense related to a $6.1 billion pension payment will be earnings drags, rate hikes, expansion into China, recent acquisitions and share repurchases should propel EPS growth. In January, UPS instituted a two-year, $10 billion share repurchase plan and announced a 7% increase in the dividend.

At its current price, UPS is trading at a 13% premium to the industry median P/E (versus a 0% premium at the time of our last report on July 22, 2008), based on 2009 consensus estimated earnings. It is trading at substantial premiums to the group based on price/sales and price/book value.

While UPS’s projected five-year earnings growth rate matches the median of its peer group, its operating margin, dividend yield and return on equity (ROE) are significantly higher than all of its peers. Superior operating efficiency, balance sheet strength, and ROE justify a premium valuation to the peer group. Therefore, we expect valuation to expand from currents levels. Our price target is $75, based on roughly 17 ¼X our 2009 EPS estimate of $4.15, representing a 21% premium to the peer group.

Read the full analyst report on UPS