Long Term Perspective

Typically, changes in the Dow Jones Transportation Index will lead changes in the industrial average. In 2005, the Transportation index increased 10.5 percent, a strong showing considering the continued spurt in energy prices during the year. The 10-year average moderated to 9.3 percent in 2005, less than the 2004 pace, but still a healthy gain.

Short Term Perspective

The 20 companies that comprise this index are: Airborne Inc., Alexander & Baldwin, AMR, Burlington Northern, Continental Airlines, CNF Transportation, CSX, Delta Airlines, FedEx Corp., GATX Corp., J.B.Hunt Transportation Service, Norfolk Southern, Northwest Airlines, Roadway Express, Ryder System, Southwest Airlines, Union Pacific, United Parcel Service, US Freightways, and Yellow Corp.

The Transportation index generally posted healthy year-over-year gains in 2005, but these were smaller than the previous years' gains. The Transportation index was up 14.9 percent in November after climbing 23.9 percent in October when compared with the same month a year ago. The Transportation index was up 12.7 percent when compared with its end of December 2005 level.

After gaining for two straight months, the Transportation index was unchanged in November. The Transportation index is considered a leading indicator for the Industrials index, so it is important to keep monitoring trends here - even if the index is at odds with other stock market measures.