UBS Downgrade Derails Union Pacific

(Updated for stock price at market close)

NEW YORK (TheStreet) --Union Pacific(UNP Quote) shares were down 2.6% on Tuesday as a downgrade from UBS pushed down most names in the rail sector.

In a new research report on the rail industry, UBS downgraded Union Pacific from buy to neutral as part of its argument that mini-bubble proportions were being reached in the rail industry thanks to Warren Buffet. Shares of Union Pacific had soared almost $11 since the announcement of Warren Buffet's acquisition of Burlington Northern (BNI Quote) at the beginning of the month.

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The downgrade and fears of a bubble in rails had a big impact on the rail sector, with most of the major stocks trading down. Canadian National Rail(CNI Quote) and Canadian Pacific Railways(CP Quote) and CSX(CSX Quote) were down approximately 1.6% and 1.4%, respectively.

Burlington Northern eeked out a 0.4% gain at the end of day. Transportation, as a whole, was off 0.8% on Tuesday.