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<blockquote data-quote="moreluck" data-source="post: 88607" data-attributes="member: 1246"><p><span style="font-size: 18px"><strong>Dow Transports Soar To Record</strong></span></p><p><span style="font-size: 18px"></span><span style="color: #003399">Robert Malone, </span><span style="color: #666666">05.04.06, 2:00 PM ET</span> </p><p>New York - </p><p>A leading gauge of the United States transport business--the Dow Jones Transportation Average--surged to an all-time high on Thursday, indicating a very healthy transportation sector and, more broadly, a healthy economy.</p><p>Without a healthy economy, manufacturers don't ship, and consumers don't order, so in recent years the Dow Transports have become a key bellwether of economic climate, far beyond the narrow sector it tracks. </p><p>The oldest index in use (since 1884 and then principally railroad companies), the DJTA tracks 20 leading companies that constitute the cream of the industry in rail, air and ground transportation. Their principal modes are highly connected to transportation in the sea lanes as well.</p><p>There are several good reasons for this surge in the Dow Transports. China trade continues to dominate, and that means transportation of containers to the U.S. Of the 17,000 shipping containers that come into the country each day, the majority are Chinese exports. They are shipped, trucked and passed through intermediary facilities all over the country.</p><p>This business also includes major expenses and profits for distribution centers set up in China by U.S. third-party companies like <ORG>UPS<ORGID idsrc="nyse" value="UPS"></ORGID></ORG> and <ORG>FedEx<ORGID idsrc="nyse" value="FDX"></ORGID></ORG>, among others. The health of these U.S.-based companies is being supported by increased global trade. </p><p>A second major cause of this stock surge comes from the 3.2% increase in U.S. productivity, which translates into greater transportation demand to move goods as materials, parts and finished products.</p><p>The entire supply chain benefits from increased productivity, since at each stage of a product's transportation life cycle, there are complex transits involved, and warehouses, terminals and distribution centers are kept busy sorting and redistributing. </p><p>When this productivity is coupled with the good figures out today on solid U.S. April retailing business, a clear demand is in place. Retailing is where the demand for goods is initiated, and strong sales call for more orders of more goods. In a domino effect, strong product orders can, in time, lead to even more shipping business through returns, refurbishing and replacement.</p><p>A third factor for the increase in the transport index is the track record of the companies that make up the average. For instance, <ORG>Burlington Northern Santa Fe<ORGID idsrc="nyse" value="BNI"></ORGID></ORG> has seen a first-quarter increase of 31% in earnings over a year ago. And UPS has just stated that it's racked up an 11% increase in first-quarter profits versus last year's figure. </p><p>The supply chain is now a multi-faceted system that can only be understood in a global context. It is this global context that is fueling the shares' increase.</p></blockquote><p></p>
[QUOTE="moreluck, post: 88607, member: 1246"] [SIZE=5][B]Dow Transports Soar To Record[/B] [/SIZE][COLOR=#003399]Robert Malone, [/COLOR][COLOR=#666666]05.04.06, 2:00 PM ET[/COLOR] New York - A leading gauge of the United States transport business--the Dow Jones Transportation Average--surged to an all-time high on Thursday, indicating a very healthy transportation sector and, more broadly, a healthy economy. Without a healthy economy, manufacturers don't ship, and consumers don't order, so in recent years the Dow Transports have become a key bellwether of economic climate, far beyond the narrow sector it tracks. The oldest index in use (since 1884 and then principally railroad companies), the DJTA tracks 20 leading companies that constitute the cream of the industry in rail, air and ground transportation. Their principal modes are highly connected to transportation in the sea lanes as well. There are several good reasons for this surge in the Dow Transports. China trade continues to dominate, and that means transportation of containers to the U.S. Of the 17,000 shipping containers that come into the country each day, the majority are Chinese exports. They are shipped, trucked and passed through intermediary facilities all over the country. This business also includes major expenses and profits for distribution centers set up in China by U.S. third-party companies like <ORG>UPS<ORGID idsrc="nyse" value="UPS"></ORGID></ORG> and <ORG>FedEx<ORGID idsrc="nyse" value="FDX"></ORGID></ORG>, among others. The health of these U.S.-based companies is being supported by increased global trade. A second major cause of this stock surge comes from the 3.2% increase in U.S. productivity, which translates into greater transportation demand to move goods as materials, parts and finished products. The entire supply chain benefits from increased productivity, since at each stage of a product's transportation life cycle, there are complex transits involved, and warehouses, terminals and distribution centers are kept busy sorting and redistributing. When this productivity is coupled with the good figures out today on solid U.S. April retailing business, a clear demand is in place. Retailing is where the demand for goods is initiated, and strong sales call for more orders of more goods. In a domino effect, strong product orders can, in time, lead to even more shipping business through returns, refurbishing and replacement. A third factor for the increase in the transport index is the track record of the companies that make up the average. For instance, <ORG>Burlington Northern Santa Fe<ORGID idsrc="nyse" value="BNI"></ORGID></ORG> has seen a first-quarter increase of 31% in earnings over a year ago. And UPS has just stated that it's racked up an 11% increase in first-quarter profits versus last year's figure. The supply chain is now a multi-faceted system that can only be understood in a global context. It is this global context that is fueling the shares' increase. [/QUOTE]
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