09 April 2008

UPS Not Greenspan

Former Federal Reserve Chairman Alan Greenspan chimed in saying the U.S. economy was in recession, and said it would be appropriate to tap public funds to resolve the mortgage-related crisis that has helped pull the economy under.

That's all well and good but a better weather vane for the economy is UPS. I should have included them when I suggested keeping an eye on companies like Apple, RIM (BlackBerry), Best Buy, et al. as indicators for the strength and status of the economy.

So while Greenspan was waxing on CNBC that none of this was his fault, the world's largest shipping carrier cut its earnings forecast for the January-March (1st Quarter) period citing exorbitant fuel costs, and reduced domestic package volume (read: a drop in business-to-business transactions and paper shuffling).

UPS lowered the first-quarter earnings expectations to 86 or 87 cents per share, compared with a previously anticipated range of 94 to 98 cents a share.

UPS fell $3.06 to $70.25 while FedEx fell $1.56 in solidarity during after-hours e-trading.

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