Shippers Rally in the Air and at Sea

• By the tickerspy.com Staff
• On 11:31 am EDT, Friday September 11, 2009

With commodities up to end the week, investors are turning to the ships that carry them.

Dry bulk shipping stocks are up across the board today in response to the continued commodity rally and growing optimism for economic recovery. While it seems the tide is rising for these shipping stocks, there could be some lag between the global economic recovery and the return of international trade.

In an interview with The Economic Times, Shipping Corporation of India chairman and managing director S. Hajara said the worst is over, but there is going to be "tremendous supply side pressure until 2011." Hajara commented that even if the global economy were to recover in the next six weeks, it could be another six months before international trade really gets back on track. Still, optimism that demand will return is benefiting the industry, as is stabilization in the commodity markets.

As a whole, the Dry Bulk Shipping Stocks Index is up by 2.3% today. Over the last month, however, the sector has lagged the S&P 500 by -2.3%.

Today's biggest winners include DryShips (NASDAQ: DRYS - News), OceanFreight (NASDAQ: OCNF - News), and Eagle Bulk Shipping (NASDAQ: EGLE - News). All three are ahead by more than 4.5%.

Half of the sector has earned double-digit returns over the last week. Diana Shipping (NYSE: DSX - News), Genco Shipping & Trading (NYSE: GNK - News), and Safe Bulkers (NYSE: SB - News) are all up by 10% or more for the period.

Kirby (NYSE: KEX - News) is the only stock to sit out today's rally. It is also a laggard over the last week, gaining less than 5%.

Omega Navigation Enterprises (NASDAQ: ONAV - News) is the sector's only loser over the last week. The stock dropped by -11% for the period after its September 8, second quarter earnings report failed to impress investors.

Elsewhere in the shipping industry, FedEx (NYSE: FDX - News) shares are up big after the company said its fiscal fist-quarter earnings will exceed its previous expectations. The news is helping the Air Delivery Stocks Index to a 4% daily gain.

UTI Worldwide (NASDAQ: UTIW - News), United Parcel Services (NYSE: UPS - News), and Pacer International (NASDAQ: PACR - News) are all following FedEx higher.

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