- Slowing U.S. economy, industrial production tempering demand
- Share declines include parts makers such as Meritor, Cummins
Navistar International Corp. led a decline in shares of truckmakers and their suppliers after preliminary data showed that North American heavy-duty truck orders in April fell to their lowest since 2012 amid an economic slowdown.
Navistar sank as much as 12 percent to $12.71, its biggest intraday slide since March 8. Competitor Paccar Inc. tumbled as much as 4.1 percent, the most since Jan. 29. Shares of both manufacturers were headed for their fourth straight daily decline.
The North American orders slid 15 percent in April from March, according to the data. Customers are canceling deliveries amid overcapacity and weaker freight demand, said Bloomberg Intelligence analyst Karen Ubelhart. A slowing U.S. economy, which often moves in step with truck demand, has hurt sales.
“You saw a very strong 2014 and 2015 in truck demand as freight was growing, then as the U.S. economy started to slow, freight slowed, and orders kind of fell off a cliff,” she said in a phone interview. “Until we get industrial production picking up again, I think orders are going to stay weak.”
Meritor Inc., a maker of drivetrain, axle, brake and suspension parts for trucks, dropped 4.2 percent to $7.50 at 2:07 p.m. New York time, after declining 6.3 percent Tuesday. The company on Wednesday cut its full-year earnings forecast for the second time and said slowing truck production pressured sales in its fiscal second quarter.
Cummins Inc., an engine maker that counts Paccar and Navistar among its biggest customers, was down 3.7 percent to $114.18 after falling as much as 4.8 percent, the most intraday since March 8.