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.

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  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. 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 >>
  5. 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 >>
  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 >>

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