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What's Driving the Dow Transports?

Despite the ongoing rise in crude oil prices and the overall concerns of a weaker economy, the Dow Jones Transportation Average hit new all-time highs today. It passed its previous intraday high of 5,487.05 that it had set last July. If it closes over 5,446.49 today, it will set a new all-time closing high.

Below is the performance of the 20 Dow Transport components since the index hit its previous closing high on July 19, 2007. Note that less than half (9 out of 20) of the components are up since then. Three of the components – all airlines – have lost 50% of their value since July. So why is the index at new highs?

Keep in mind, like the Dow Jones Industrial Average, the Dow Transports is a PRICE-weighted index – meaning the stocks with the higher prices will have more impact on the index’s movements. As shown below, many of the higher-priced stocks (mostly the railroads) have moved up the most, whereas the majority of the big decliners (mostly the airlines) are very low-priced stocks.

Today's Price Since Index’s Previous
(as of 1:40pm) High on 7/19/07
R $76.53 +39.81%
CSX $68.38 +33.40%
UNP $158.24 +25.85%
CHRW $66.93 +22.74%
BNI $111.49 +21.17%
JBHT $35.98 +20.50%
NSC $66.40 +14.82%
LSTR $55.39 +10.85%
EXPD $48.09 +2.54%
GMT $49.00 -2.70%
OSG $84.73 -5.34%
UPS $71.47 -5.76%
CNW $50.72 -10.12%
ALEX $51.19 -12.03%
LUV $13.42 -18.17%
FDX $92.19 -21.34%
YRCW $19.66 -45.75%
CAL $17.59 -50.87%
JBLU $5.07 -56.33%
AMR $9.09 -66.27%