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Typically, changes in the Dow Jones Transportation Index will lead changes in the industrial average. In 2006, the Transportation index increased 8.7 percent, a strong showing considering airlines and other transports had to adjust to the mid-year spike in oil prices. The 10-year average moderated to 8.7 percent in 2006, down from the 9.3 percent gain in 2005.
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 2006 and at the start of 2007, but during the second half has been buffeted by subprime concerns and rising oil prices. The Transportation index was down 1.4 percent, year-on-year in November, compared to up 3.8 percent in October and the recent high of 23.9 percent in October of 2006. The Transportation index was up 2.2 percent in November when compared with its end of December 2006 level.
The Transportation index fell 5.0 percent in November after a 1.5 percent rebound in October. 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.
About the Stock Market • The Dow Jones Family • The S&P Family • Other Key Market Indices
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