Dow Transport Stocks Travel To New Highs

Planes, trains and boats are the best ways to play the "Dow theory," says Bill Nichols, senior managing director for equity trading at Bear Stearns. He told "Morning Call" viewers what record Dow Jones Industrial Average and S&P 500 levels mean for transportation stocks.

Nichols said that analysts are seeing "new highs" for once-beleaguered transport and industrial companies' shares. He told CNBC's Liz Claman that the market is keeping "a lot of focus on the 'Dow Theory'" -- that is, when the Dow and transport companies are reaching new highs simultaneously, it is a "good indicator of higher numbers going forward."

The managing director says the theory was borne out Thursday morning, when the Transport Index rose 1% -- even while "some financials were backing away."

Which types of transportation will dominate the stock market? Nichols shied from naming specific companies, but emphasized "shipping and rail more than airlines." And he underscored that "you'll see money sprinkled across the board" -- regardless of market-cap size.