You’re Overlooking These Soaring Dow Stocks: Union Pacific Corporation (UNP) and More

All of the Transports share some common traits but have their own particular spins on many issues. For instance, fuel costs are a big driver for all transportation stocks, but railroads have a fuel-efficiency advantage over airlines and trucking companies that plays a vital role when energy prices spike higher. Similarly, certain types of goods lend themselves to transport by particular methods, and so strength or weakness in those areas of the economy leads to favorable or unfavorable conditions for the transportation stocks that depend on moving those goods.

Pay attention to the “other” Dow
After such a strong rally, it’s no easier to predict whether the Transports’ rally will continue than it is for the Industrials or any other stocks. With the catalyst that drove airline stocks higher having played itself out, the Transports will need to find another reason to move higher if they want to sustain and expand on their rally.

More generally, though, the key lesson to take away is that while the Dow Industrials have a good cross-section of companies that span across most major industries, leaving out transportation and utility stocks leaves some significant gaps. Keep your eyes on the other Dow averages to make sure you get the complete picture of what’s happening in the stock market.

The article You’re Overlooking These Soaring Dow Stocks originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends FedEx.

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