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Wednesday, April 08, 2009

US shipping shares dive ahead of earnings season

By Rajesh Joshi in New York - Wednesday 8 April 2009


SHIPPING shares took a pounding in New York yesterday, with losses across the board for all major industry sectors far outstripping the relatively modest declines elsewhere. 
In the dry bulk space, DryShips and OceanFreight lost 12% each, with shares closing at $4.54 and $1.21, respectively. Excel Maritime was the other double-digit loser, down 11% to $5.72. 
Eagle Bulk Shipping, Genco Shipping & Trading and FreeSeas each lost 8% of their value, while Diana Shipping, Euroseas and Paragon Shipping fell almost 6% each. 
Containership owner Danaos lost 6% of its value to $3.27, while Seaspan posted a relatively modest decline of 3% to $9.14. Jones Act player Horizon Lines, however, slumped by 11%, to $3.27. 
The tanker sector saw Overseas Shipholding Group and its spinoff Double Hull Tankers leading the losses with falls of 9% each, to $24.08 and $3.70 respectively. 
Frontline was down 6% to $17.60, while Teekay Corp lost 4% to $13.18. 
The only noteworthy US-based exception yesterday was General Maritime, whose share price firmed by 4% to $8.27, after the Peter Georgiopoulos company was upgraded by JP Morgan.
In comparison, the Dow Jones Industrial Average was down by 2.3% on the day, to 7,789.56 points. 
The Dow’s muted performance, tending towards a slight decline, was attributed to investor caution ahead of the traditional earnings reporting season. In the shipping sector, however, the direct link among commodities, world economies and corporate profits appeared to have kick-started a wider sell-off. 
The earnings season was scheduled to kick off with an announcement by US aluminium maker Alcoa after the market close yesterday. Analysts have expressed expectations of a second straight quarterly loss, which is seen as linked with weakness in world energy demand.