NEW YORK ( TheStreet) -- Railroad stocks have remained calm even as the industry's labor situation moves closer to potential upheaval with each passing day.
The country's operators of Class I railroads remain in talks with three rail unions, who could opt to go on strike once a "cooling period" between the two parties ends at midnight on Dec. 6. The risk of a strike is mitigated however by a provision in the U.S. Constitution that could block any work stoppage.
The "Commerce Clause," or Article I, Section 8, Clause 3 of the Constitution says that Congress has the enumerated power "To regulate Commerce ... among the several States," and Congress can invoke that clause to prevent the strike and save the country from losing an estimated $2 billion a day.
|Congress can intervene in the railroad-union labor dispute|
"A shutdown of our nation's railways, which would harm our economy and endanger many American jobs, is unacceptable," House Speaker John Boehner (R., Ohio) said in a statement Tuesday. "The House is prepared to take legislative action in the days ahead to avert a job-destroying shutdown of our nation's railroads, in the event such legislation proves necessary."The railroad stocks moved modestly on Thursday with the biggest gainer of the day being Kansas City Southern (KSU), which closed at 68.77, up 74 cents, or 1.1%. The sector's biggest laggard was Norfolk Southern (NSC), which closed at $74.78, down 76 cents, or 1%. One railroad analyst, who spoke on the condition of anonymity, said that a rail stoppage is possible, but didn't think it would affect rail stocks in the long term. "It would probably dip, but it wouldn't change the long-term thesis in rail. ... I would generally think that they
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