Last night's warning from Union Pacific ( UNP) could take its toll on the transportation sector today.

The nation's largest railroad company warned after the bell of lower fourth-quarter earnings amid "clear signs of an economic slowdown," and said it plans to cut 2,000 jobs, or 4% of its workforce, resulting in a charge of about $70 million, or 26 cents a share, in the fourth quarter.

The Omaha, Neb.-based company said it now expects fourth-quarter earnings, before the one-time charge, to be between 87 cents and 90 cents a share, down from 95 cents a share in the same period last year. Nine analysts polled by First Call/Thomson Financial produced a consensus estimate of 93 cents a share for the quarter.

"The downward trend in the economy has accelerated sharply in the past few weeks. The railroad's fourth-quarter carloadings are expected to rise by only one percent over a year ago, considerably below our forecast. An increasing number of our customers report that their business levels have weakened, and few see any signs of significant improvement," the company said it its statement. Union Pacific said its employment averaged about 50,000 through November this year.

Shares of Union Pacific closed at $52.63 in trading on the New York Stock Exchange Wednesday, close to its 52-week high of $52.81.