Navistar (NAV) Shares Hit as Special EPA Rule Tossed Out in Federal Court

June 12, 2012 12:08 PM EDT
Shares of Navistar (NYSE: NAV) are slumping Tuesday following reports the U.S. Federal Appeals Court vacated an EPA rule which would allow the company to sell heavy-duty diesel truck engines that don't meet pollution standards.

The measure will be good for Navistar competitors Cummins (NYSE: CMI), Volvo, and Daimler.

According to Dow Jones, the U.S. Court of Appeals for the District of Columbia Circuit tossed the Environmental Protection Agency rule, saying it did not have good cause to institute the rule which would allow Navistar to pay fines, but still be able to sell the polluting engines. Despite Navistar's recent trouble, the judge in the case said the EPA's rule didn't stave off any environmental, safety, or national security emergency, just the "emergency" on Navistar's bottom line.

Navistar has not issued a comment on the ruling. Shares are down 9.5 percent on the session; volume is heavy.

Shares of Navistar rose 1.3 percent Monday on speculation the company might be a takeover target for Volkswagen, though firm Sterne Agee said any deal would likely be a long process.

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