Key Highlights

● Third-quarter Earnings of $3.41 a share beat the $3.30 forecast.

● Revenue of $982.45 million topped the $966.98 million consensus.

● The stock opened at $348.00 but later traded near $321.25, below the prior close.

● No specific reason for the Reversal was reported.

Saia (NASDAQ:SAIA) opened sharply higher after topping third-quarter forecasts, but the trucking company's early surge evaporated as the session wore on, leaving the stock slightly below where it started.

A gap up at the open

Saia, the less-than-truckload carrier that moves freight for businesses across the United States, gave investors plenty to like when it reported its third quarter. Earnings came in at $3.41 a share, ahead of the $3.30 analysts had forecast. Revenue of $982.45 million beat the $966.98 million consensus and grew solidly from a year earlier, according to market data.

The stock reacted immediately. After closing the prior session at $324.62, it opened on Thursday, October 29, at $348.00, a sizeable gap higher that put it among the most-talked-about names in the S&P MidCap 400.

Then the fade

The enthusiasm did not last. As the session progressed, the shares gave up their opening gains and later traded around $321.25, slightly below the prior close, according to market data. In a single day, the stock went from a strong opening jump to a modest loss.

There was some confusion in the coverage. One market-data subhead described the stock as up on the day, but its own price figures, an opening price of $348.00 and a later level near $321.25 against a $324.62 prior close, implied a small decline after the gap up. The direction from the opening high, however, was unambiguously lower.

Why stocks fade after a beat

No specific reason for the reversal was reported, so it would be wrong to assign one. In general, gap-ups that fade can happen when early buyers lock in quick gains or when investors decide, after a closer look at the details, that the beat was already reflected in the share price. Whatever the mechanism, the result was that Saia gave back the entire move. The swing from the $348.00 open to the later level near $321.25 amounted to roughly $27 a share, a wide intraday range for a stock that had just beaten estimates on both earnings and revenue.

Freight on a mixed day

Saia's round trip came on a busy day for transportation stocks. Norfolk Southern (NYSE:NSC) signed an intermodal Partnership with Schneider National (NYSE:SNDR) that makes the railroad Schneider's "primary eastern rail provider," according to market reports. Schneider itself reported revenue in line with expectations, an earnings miss and raised guidance. Parcel giant UPS (NYSE:UPS) had reported its own results earlier in the week, on Tuesday, October 27. Oil, a major cost input for trucking, settled lower, with WTI at $102.00 a barrel, down 78 cents.

The market's split personality

The broader market showed a similar push and pull. The S&P 500 slipped 23.59 points to 7,720.39 and the Nasdaq Composite fell 365.13 points to 26,184.72 as Alphabet (NASDAQ:GOOGL) posted its worst day since its 2004 IPO. Yet the Russell 2000 climbed 28.71 points to 2,859.22, and NYSE advancers beat decliners by 1.95 to 1.

Economic data pointed to strength. Third-quarter GDP accelerated from the second quarter and beat forecasts, a backdrop that typically supports freight demand. But hot September PCE Inflation kept a December Fed rate hike on the table, a potential headwind for economically sensitive stocks.

What to watch

The first question is whether buyers return on Friday after Thursday's reversal, or whether the selling that erased the gap continues. How the stock trades relative to the $324.62 prior close and the $348.00 opening high will offer clues about sentiment.

Investors will also look for details from management on freight volumes, pricing and costs, which drive less-than-truckload profitability. With oil still above $100 a barrel and rates potentially heading higher, fuel costs and the strength of industrial Demand will remain central to Saia's outlook.