Aug. 25 (Bloomberg) -- Werner Enterprises Inc. and Knight Transportation Inc. led U.S. trucking stocks lower after Wachovia Corp. cut its ratings and said demand is slowing.

``We are increasingly cautious about overall freight demand as we enter what would typically be peak shipping season from late-August through November,'' analyst Justin Yagerman wrote in a note to clients. ``August volumes have been lackluster to date as the benefit of the tax rebates has abated and consumers contend with inflationary pressures.''

Werner, the trucking and logistics company with operations in North America and China, and Knight, the Phoenix-based short- haul trucking company, were lowered to ``market perform'' from ``outperform.'' Yagerman reduced his rating on the industry to ``market weight'' from ``overweight.''

Werner fell 6.3 percent to $22.45 for the biggest drop in the five-member Standard & Poor's Midcap Trucking Index. Knight lost 2.7 percent to $17.60. YRC Worldwide Inc., the biggest U.S. trucking company, dropped 4.2 percent to $17.32.

Ryder System Inc., the largest U.S. truck-leasing company, fell the most in a month, losing 6.4 percent to $64.72 for the fifth-biggest decline in the S&P 500. The company wasn't mentioned in Yagerman's note.

S&P's trucking index slipped 3.9 percent. Before today the gauge had climbed 13 percent this year.

To contact the reporter on this story: Jeff Kearns in New York at jkearns3@bloomberg.net.

Last Updated: August 25, 2008 16:15 EDT