Stop Trading!: Economy Putting Brakes on Transports?

Norfolk Southernreported a better-than-expected quarter Wednesday and said pricing momentum for the transportation firm will continue through June, but Cramer disagreed.

All the items Norfolk moves – coal, agriculture equipment, fertilizer – most likely will not hold up next year, Cramer said during his regular Stop Trading! appearance today, so the rail company shouldn’t expect business to continue at its present pace.

Rails across the board will probably slow, Cramer said. He would only recommend the corporate bonds CSX recently issued rather than any common stock in the sector.

Ryder System is another transportation company that is also struggling in this tough economy.

In the steel sector, Cramer said he preferred Nucor over U.S. Steel because the former’s raw costs are much more manageable and it offers a better dividend yield. Cramer expects U.S. Steel to continue to decline.

Lastly, Cramer said that sinking oil prices will most likely lead to canceled deepwater drilling projects. That’s why Transocean’s share price can’t seem to find a bottom, though a shallow-water driller like Diamond Offshore is less affected.

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