Norfolk Southern stock continued to slump Tuesday as the cleanup of hazardous materials from a Feb. 3 train derailment in East Palestine, about 50-miles northeast of Pittsburgh, is still underway and lawsuits begin to pile up.
Two weeks ago, a Norfolk Southern 150-rail car train, transporting hazardous materials, derailed in flames while passing through the eastern Ohio town of East Palestine. Cleanup crews ordered residents to evacuate the area as officials decided last week to perform a "controlled" release of hazardous chemicals instead of risking a larger explosion.
Five of the derailed cars in East Palestine were carrying the chemical vinyl chloride, a type of gas. Exposure to vinyl chloride is associated with certain forms of cancer, according to the National Cancer Institute.
However, state environmental regulators said harmful levels had not been detected in East Palestine, according to local media reports. Officials lifted the evacuation order on Feb. 8, but many residents remain uncertain about returning to their homes. The U.S. Environmental Protection Agency (EPA) wrote Friday hazardous materials are "known to have been and continue to be released to the air, surface soils and surface waters."
"I've watched every news conference and I haven't heard anything that makes me think that this is a data-driven decision," resident Maura Todd, 44, told the Washington Post. "We don't feel like we have a whole lot of information."
There are also growing reports of animals falling ill, dead fish appearing in waterways and residents experiencing burning eyes.
Now, Norfolk Southern is facing a mounting number of lawsuits. Some East Palestine residents allege, in a federal case, that NSC was negligent and caused the accident. The residents are demanding the company pay for medical screenings. Another class action lawsuit seeks damages for costs associated with the evacuation.
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Norfolk Southern Stock: East Palestine Crash
Norfolk Southern stock sank 1.8% to 235.34 Tuesday during market trading. On Monday, NSC shares shook off a 4% premarket drop and dipped 1.2% to 239.74. Norfolk Southern stock had edged up 1.5% Friday to 242.61. Shares have formed a flat base with an official 261.81 buy point, according to MarketSmith.
Other railroads, including Union Pacific, Canadian Pacific and CSX moved lower Tuesday during trade.
The EPA has said Norfolk Southern "may be responsible" for the cleanup and "costs EPA has incurred in cleaning up the site."
Meanwhile, rail labor unions have argued "Precision Scheduled Railroading" (PSR) could be at fault in the derailment. The rail industry has adopted PSR to increase efficiency and reduce the size of overall freight car fleets as they move cargo on fewer, but longer trains.
However, rail labor leaders have argued this practice has cut jobs and made trains less safe, with fewer workers and less time to conduct safety checks on additional rail cars.
Norfolk Southern stock ranks fourth in the Transportation-Rail industry group. NSC shares have an 56 Composite Rating out of 99. The stock has a 29 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS rating is 89.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
