NEW YORK (MarketWatch) - Demand for express shipping is deteriorating rapidly with the downturn in the economy, overwhelming the benefit from both DHL's withdrawal from the U.S. market and from lower fuel prices, according to a Tuesday note from J.P. Morgan.

Late Monday, Fedex Corp. (FDX: 66.11, -8.32, -11.2%) cut its fiscal-year outlook, to a range of $3.50 to $4.75 a share from a prior range of $4.75 and $5.25 a share, because of declines in the express market. That's an unanticipated 17% drop in next year's earnings, wrote Thomas Wadewitz, an analyst with the investment bank.

"Our sense is that the decline in the overall market is very sharp," he said in the Tuesday note.

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