The Losing Streak for Plane, Train and Truck Stocks Is Getting Historic

(Bloomberg) -- The drop in transport stocks just won’t stop, sending shudders through theorists who view the group as an economic barometer.

Led by declines of around 2 percent in Ryder System and Southwest Airlines, the Dow Jones Transportation Average slid 1.1 percent Friday, extending to 11 days a streak of losses that has cut the gauge’s market capitalization by about $200 billion. That’s the biggest number of consecutive down days since 1972. While the decline has been unrelenting, it’s still relatively narrow, clocking in at about one-fifth the fall registered in last year’s fourth quarter.

Because they form the infrastructure on which commerce is conducted and provide clues about the strength of the economy, weakness among trucking companies, shippers and airlines is often viewed as a troubling sign for the economy. It also matters for adherents of the century-old Dow Theory, which holds that moves in transportation stocks must be confirmed by industrial companies, and vice versa, to be sustained.

“If we are going to worry about global growth slowing, including the United States, there are sectors and themes that will bear the brunt of the selling,” said Michael Antonelli, a managing director and market strategist at Robert W. Baird & Co. “Transports is one of them, small caps is another. Transports are cyclical stocks, names that are sensitive to how the market feels about global growth.”

To contact the reporter on this story: Elena Popina in New York at epopina@bloomberg.net

To contact the editors responsible for this story: Chris Nagi at chrisnagi@bloomberg.net, Richard Richtmyer

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