Dow transports drop sharply, head for another 5-day losing streak

The Dow Jones Transportation Average dropped sharply Wednesday, bucking the gains seen in the broader stock market, as the index known for its sensitivity to the economic cycle headed for fifth-straight loss. The index fell 72 points, or 0.9%, while the Dow Jones Industrial Average gained 50 points, or 0.3%, and the S&P 500 index climbed 0.5%. This would be the Dow transports' second five-day losing streak in only 12 sessions; previously, the index didn't suffer a losing streak that long since August 2015. Prior to the current bout of weakness, the index had soared 22% in two months, enough to suggest the start of a new bull market. Many see the transport sector good gauge of the economy, because it provides the link between the makers and buyers of goods. Followers of the century-old Dow Theory believe a broader market trend can't be confirmed unless the Dow transports and Dow industrials are trending in the same direction. "If the transports are taking what the industrials are making, it portends economic weakness and market problems, Dow Theorists maintain," according to S&P Dow Jones Indices.

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