Shares of U.S. railroads are declining after a court yesterday agreed to grant class action status to a lawsuit filed against them. Brought by eight rail shippers, the lawsuit accuses the railroad companies - CSX (CSX), Union Pacific (UNP), Norfolk Southern (NSC) and BNSF Railway - of illegally colluding to fix and raise fuel surcharges from 2003-2008. In a note to investors this morning, JP Morgan predicts that the railroads will appeal the judge's decision to grant class status to the lawsuit. The firm doesn't believe that the railroads violated U.S. law, but it thinks the lawsuit creates headline risk for the stocks. Moreover, JPMorgan believes that the railroad companies will become more likely to settle the case as it moves closer to a jury trial. The firm maintains an Overweight rating on Union Pacific, and Neutral ratings on CSX and Norfolk Southern. In early trading, CSX slid 2.08% to $21.64, Union Pacific gave back 1.40% to $113.84, and Norfolk Southern lost 0.93% to $70.48.
Asian stocks fell to one-month lows on Friday and the yen rebounded broadly as extreme volatility in the Nikkei …