Long Term Perspective

Typically, changes in the Dow Jones Transportation Index will lead changes in the industrial average. This index declined for five straight years, with the largest decline in 2002. This brought down the 10-year average to 6.6 percent in 2002 from a level of 8.5 percent in 2000. Let's hope that the long-standing relationship between the Transportation Index and the Industrial Index goes awry for a year or two.

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 jumped 28.9 percent in October versus a year ago. It was the largest yearly rise since April 1998.

The Transportation index surged 8.9 percent in October after briefly dipping last month. This index is considered a leading indicator of the DJIA because items ready for production, or already produced, need to be shipped to their destinations. These days, airline stocks which are a big part of the index, also reflect business and pleasure travel.