Transport Stocks: What Do They Signal for Market, Economy?

Transportation stocks are on a roll, and that could be good news for the market as a whole because the group is often a leading indicator for equities.

The rise of transportation stocks also can be a sign of strength for the economy, as the companies in the sector are vital to the economy’s health.

The Dow Jones Transportation Average, which includes 20 major companies, has moved up 8.5% in the past month, compared with a 5.3% gain for the S&P 500.

Among major U.S. transportation stocks, railroad operator Union Pacific  (UNP) – Get Union Pacific Corporation Report has climbed 10% over the past month and 21% over the past year. Package-delivery company United Parcel Service  (UPS) – Get United Parcel Service, Inc. Class B Report has risen 5% over the past month and 31% over the past year.

Another railroad, CSX  (CSX) – Get CSX Corporation Report, has gained 10% over the past month and 16% over the past year. Rival delivery company FedEx  (FDX) -…

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