Bloomberg reported that CSX Corp the biggest railroad in the eastern US fell the most since December 2008 and smaller rival Norfolk Southern Corp also tumbled after two coal companies cut their forecasts.

Coal is the largest commodity by volume for the big US railroads. Walter Energy Inc reduced its second half sales forecast recently citing delays at mines in British Columbia and Alabama. Alpha Natural Resources Inc pared its outlook for full year production because of a drop in Asia demand and lower than expected output at some mines.

Mr Peter Tuz who helps manage USD 1 billion as president of Chase Investment Counsel Corp in Charlottesville, Virginia said “That's a point of evidence that the global economy is slowing down. One of the real strengths of the market of the last few years has been the upward push of commodities driven by global demand.”

Union Pacific tumbled USD 5.31 or 6% to USD 83.07. Union Pacific, Jacksonville, Florida based CSX and Norfolk Southern make up the Standard & Poor 500 Railroads Index whose drop today of 7.1% was fifth-worst among industry groups in the benchmark gauge and the steepest since 2008.

(Sourced from Bloomberg)