FedEx Corp.’s profit warning has cast a pall on the broader stock market, as a record plunge in the package delivery giant’s stock has helped trigger one half of a Dow Theory “sell” signal. FedEx shares
plunged 21.6% in afternoon trading Friday to a two-year low. The $44.25 price decline shaved about 270 points off the Dow Jones Transportation Average
accounting for more than one-third of the Dow transports’ 774-point, or 5.7% drop. Read more about FedEx’s profit warning.
The transportation sector tracker is on track to close below its June low, which at the time marked the lowest close in 16 months. The Dow transports’ selloff is sending an important message about the health of the broader stock market, given that the index is viewed by many as a leading economic indicator. There’s a saying on Wall Street that the companies in the Dow transports “take” to buyers what the companies in the Dow Jones Industrial Average
“make.” And basically, if transports aren’t taking, the economy isn’t moving, and the stock market will be falling. Don’t miss: Why FedEx’s profit warning is such bad news for the U.S. economy, and FedEx shares on track for their worst week since the 1987 stock market crash. The Dow transports’ new low follows a big 18.2% bounce off the June low to the mid-August closing high. But since that high was well below the first recovery high seen in March, which in turn was below the November 2021 record close, the index has continued a pattern of lower lows …