Dow Jones Transportation Average - DJTA


DEFINITION of 'Dow Jones Transportation Average - DJTA'

A price-weighted average of 20 transportation stocks traded in the United States. The Dow Jones Transportation Average (DJTA) is the oldest U.S. stock index, compiled in 1884 by Charles Dow, co-founder of Dow Jones & Company. The index initially consisted of nine railroad companies - a testament to their dominance of the U.S. transportation sector in the late 19th and early 20th centuries - and two non-railroad companies. In addition to railroads, the index now includes airlines, trucking, marine transportation, delivery services and logistics companies.

BREAKING DOWN 'Dow Jones Transportation Average - DJTA'

Railroad Union Pacific is the only one of the original DJTA components to continue in the index.

The Dow Jones Transportation Average is closely watched to confirm the state of the U.S economy, especially by proponents of Dow Theory. This theory maintains that as the industrials make and the transports take, the DJTA should confirm the trend of the Dow Jones Industrial Average (DJIA), with a divergence indicating a potential reversal of the trend. In other words, if the DJIA is climbing while the DJTA is falling, it may signal economic weakness ahead, since goods are not being transported at the same rate at which they are being produced, suggesting a decline in nationwide demand.

  1. Nasdaq

    A global electronic marketplace for buying and selling securities, ...
  2. Revenue Per Available Seat Mile ...

    A unit of measurement that is used to compare the efficiency ...
  3. Cost Per Available Seat Mile - ...

    A common unit of measurement used to compare the efficiency of ...
  4. Blue Chip

    A nationally recognized, well-established and financially sound ...
  5. Dow Jones Industrial Average - ...

    The Dow Jones Industrial Average is a price-weighted average ...
  6. New York Stock Exchange - NYSE

    A stock exchange based in New York City, which is considered ...
Related Articles
  1. Bonds & Fixed Income

    How Now, Dow? What Moves The DJIA?

    Find out how this index tracks market movements and where it falls short.
  2. Personal Finance

    How Stock Market Indexes Changed Investing

    Find out how the first market averages were calculated and what they mean for investors today.
  3. Options & Futures

    Why The Dow Matters

    Although the DJIA only includes 30 stocks, it can tell you a lot about the market as a whole.
  4. Mutual Funds & ETFs

    Index Investing

    Get to know the most important market indices and the pros and cons of investing in them.
  5. Investing News

    What Shook the U.S. Stock Market Today?

    What was looking as a decent year for US Stock market has suddenly gone off track as the Dow Jones Industrial Average plunged 531 points in the week ending August 23, 2015.
  6. Fundamental Analysis

    Calculating Free-Float Methodology

    Free-float methodology is used to calculate the total market capitalization of an index’s underlying companies.
  7. Trading Strategies

    Microsoft's Game of Catch-Up With The Dow

    Microsoft (MSFT) underperformed the Dow Jones Industrial Average during the 2002 to 2007 bull market, but it has played catch-up in recent years.
  8. Economics

    Do Transport Stocks Signal a U.S. Selloff?

    The Dow Jones Transportation Average index has underperformed the broader DJ Industrials Average, leading some market watchers to speculate a selloff.
  9. Stock Analysis

    IBM Vs. The Dow Jones Industrial Average

    IBM has lagged the Dow since 2013 and could fall further before finding enthusiastic buyers.
  10. Stock Analysis

    Why Hasn't McDonald's Beaten The Dow Recently?

    McDonald's has underperformed the Dow Industrials since 2009, but a reorganization and buyback could turn things around.
  1. Is the Dow Jones a public company?

    The Dow Jones Industrial Average tracks publicly owned corporations, but it is not a public company itself. The DJIA, usually ... Read Full Answer >>
  2. How is the Dow Jones Industrial Average used in the Dow theory?

    The Dow Jones Industrial Average (DJIA) is used in the Dow theory as a confirmation of strength or weakness in the Dow Jones ... Read Full Answer >>
  3. What does the Dow Jones Industrial Average measure?

    The Dow Jones Industrial Average (DJIA) is the oldest and best-known stock market index. It measures the daily price movements ... Read Full Answer >>
  4. What is the difference between the Dow Jones Industrial Average and the S&P 500

    The Dow Jones Industrial Average (DJIA) and the S&P 500 are both widely followed American stock market indexes. The major ... Read Full Answer >>
  5. How many components are listed on the Dow Jones Industrial Average?

    The Dow Jones Industrial Average, or DJIA, is a stock index comprised of 30 different companies traded on the Nasdaq and ... Read Full Answer >>
  6. How are S&P 500 index components weighted?

    S&P 500 components are weighted by free float market capitalization. Larger companies affect the value of the index to ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  2. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  3. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  4. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  5. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  6. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!