Union Pacific Drops Most in 7 Years as Pricing Power Wanes
- Railroad sees freight volume dropping 6% to 8% this year
- Cowen analyst cuts rating because of minimal rate increase
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Union Pacific Corp. tumbled the most since 2009 as the largest publicly traded railroad signaled that pricing power has eroded with a decline in freight demand.
Rates rose just 1.5 percent in the third quarter, having declined steadily from 4 percent in last year’s second quarter, Union Pacific reported, sparking investors to doubt whether the carrier can continue to boost prices above inflation.