Shares of FedEx Corp. (FDX) surged 5.0% and of United Parcel Service Inc. (UPS) rallied 4.2% in premarket trading Wednesday, after The Wall Street Journal reported that Amazon.com Inc. (AMZN) was halting a delivery service known as Amazon Shipping that directly competes with the package delivery services. J.P. Morgan analyst Brian Ossenbeck kept his ratings at neutral for both FedEx and UPS, but said he expects the stocks to react "favorably" to the WSJ report. "The news reads slightly more positive for FedEx considering it no longer ships for Amazon and was viewed as at risk for direct competition," Ossenbeck wrote in a note to clients. "However, we expect UPS will also benefit on news its largest customer has suspended a competing service for non-Amazon volumes, but we expect Amazon will continue to insource its own deliveries over time." The WSJ report out late Tuesday, which cited people familiar with the matter, said Amazon was suspending the Amazon Shipping service ( ), which was available in only a handful of cities, because it needed its people and capacity to handle a surge in its own customers' orders. Shares of FedEx have lost 23.3% year to date through Tuesday and of UPS have declined 20.6%, while Amazon's stock has gained 8.9% and the Dow Jones Industrial Average has declined 20.6%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
April 08, 2020 09:04 ET (13:04 GMT)
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