Long Term Perspective

Typically, changes in the Dow Jones Transportation Index will lead changes in the industrial average. This index declined for four straight years, with the largest decline in 2001. This brought down the 10-year average to 8.5 percent in 2001 from a level of 14.5 percent in 2000.

Short Term Perspective

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

The transportation index improved in early 2001 after a very negative year in 2000, but was hit again later in the year when an economic recession coupled with the tragic terrorist attacks on September 11 devastated the airline sector. There was little improvement in the first quarter of 2002, but April through September were devastating months.

The Transportation index increased in October and November, just about reversing the August and September declines. The index has posted seven gains in twelve months. United Airlines, a component of this index, has just filed for bankruptcy. It will probably have a negative impact on the index in November.