Surely, Transportation ETF Gets a Lift from Airline Stocks (Don't Call Them Shirley)

The transportation exchange traded fund (ETF) wrapped up trading today slightly higher after oil prices took a breather.

The iShares Dow Jones Transportation Average (IYT) was up 0.8% after three of its airline holdings blasted off in trading today. Oil prices closed at $116.44 after demand for gas and other petroleum products dropped sharply in February.

• Continental Airlines, Inc. (CAL), up 3.5%; 1.9% of the fund
• Southwest Airlines (LUV), up 3.3%; 1.4% of the fund
• JetBlue Airways (JBLU), up 2.6%; 0.6% of the fund

Year-to-date, IYT is up 14%.

For full disclosure, some of Tom Lydon's clients own shares of IYT.

Boeing Lifts Aerospace ETFs, But Will Airline Woes Ground Them?

Boeing's stronger-than-expected earnings numbers this morning cleared aerospace and defense exchange traded funds (ETFs) for takeoff.

Boeing (BA) is the world's second-largest commercial airplane manufacturer, reports Ashley M. Heher for the Associated Press. Its earnings grew 38% in the first quarter, beating Wall Street estimates, but sales missed expectations.

Boeing is 8.5% of iShares Dow Jones US Aerospace & Defense (ITA), which is down 9.8% year-to-date. It's also 7.1% of the PowerShares Aerospace & Defense (PPA), down 10.8% year-to-date.

What are Boeing's prospects down the line, though? The airlines are coming out with dismal numbers each day, and one would think this is going to put a dent into the number of orders they'll place for new planes.

Planes, Trains, Automobiles and ETF Feel the Fuel Pinch

Airlines aren't the only ones feeling grounded by soaring fuel costs: the transportation exchange traded fund (ETF) is in a holding pattern.

Record high prices led to three U.S. airlines reporting big quarterly losses today. UAL Corp. (UAUA), United Airlines' parent company, posted its biggest loss since a Chapter 11 restructuring two years ago. AirTran (AAI) reversed its year-ago profit, and JetBlue Airways (JBLU) also reported a loss. Their loss was smaller than expected, though, reports Kyle Peterson for Reuters.

Jet Blue is a small component of the iShares Dow Jones Transportation Average (IYT) at 0.6%. The fund also holds 1.9% of Continental Airlines (CAL), which reported losses last week.

Two other major components of the fund, United Parcel Service (UPS) and FedEx (FDX), have reported a drop in deliveries for the first quarter. UPS said earnings through March will miss projections by as much as 7.4%. FedEx said shipments were down 2% in the first quarter and that it would have limited earnings growth this year, reports Mary Jane Credeur for Bloomberg.

Together, both companies deliver 80% of packages in the United States. IYT holds 9.3% of FedEx and 7.3% of UPS.

The prices of oil and gas hit new records today: gas went above $3.50 a gallon, while oil hit $119.90 a barrel, reports John Wilen for the Associated Press.

For full disclosure, some of Tom Lydon's clients own shares of IYT.

Transportation ETF Down Today, But Could Fueled If Oil Cools Off

The nearly weeklong winning streak for the transportation exchange traded fund (ETF) seems to have ground to a halt. After rising 5.2% since April 11, the iShares Dow Jones Transportation Average (IYT) is down 2.4% midday.

Airline woes could be weighing on the fund. Continental (CAL) reported that ever-rising fuel costs contributed to a loss in the first quarter, the Associated Press reports. Fuel has become the airline's biggest expense, passing up labor. Continental is 1.9% of IYT.

Year-to-date, the fund is up 11.8%. It had been rising despite high oil prices. Air transport, in particular, is sensitive to fuel prices, reports Investor's Business Daily. Six of the 20 stocks in the fund center largely around planes.

If oil prices come down, one economists predicts that the fund could go on a run, especially since the last time the cost of fuel was so high, cars and trucks were much less efficient than they are now.

For full disclosure, some of Tom Lydon's clients own shares of IYT.

Rising Prices Hit Everything from Wallets to ETFs

We know you're going to be shocked - shocked! - to hear this: consumer prices rose last month, no doubt weighing on consumer exchange traded funds (ETFs).

The Labor Department says prices rose 0.3% in March, following an unchanged February. Core inflation, excluding food and energy, rose 0.2%. Both numbers were what analysts had been expecting, reports Martin Crutsinger for the Associated Press.

In the last 12 months, inflation has shot up 4%. Energy costs are up 17% and food is up 4.4%. Last month, airline prices rose 3% last month. Surely you've noticed.

The good news: got your eye on that spiffy outfit in the window? It might be time to buy it if you have any leftover cash. Clothing prices experienced their biggest drop in nearly a decade: 1.3%. It was the biggest one-month drop since September 1998.

Consumer-related ETFs bear the brunt of much of these price hikes, though they're up slightly midday. As those necessary goods such as food and gas become more costly, there's not much left over for frivolous spending.

• iShares Dow Jones US Consumer Goods (IYK), down 5.5% year-to-date
• Consumer Discretionary SPDR (XLY), down 6.3% year-to-date

Tom Lydon Talks Transport ETFs on ETF Tracker

Tom Lydon appeared on CNBC's "ETF Tracker" segment of Closing Bell today to discuss how the transportation sector might be the first to rebound after a recession.

For full disclosure, some of Tom Lydon's clients own shares of IYT.

Video of Tom's appearance is below:

Transportation ETF Hit By UPS's Lower Outlook

The transportation exchange traded fund (ETF) is down 2.8% midday after UPS (UPS), a major component of the fund, announced a lowered outlook.

The world's largest shipping carrier blamed a weak economy and the skyrocketing cost of fuel for needing to trim its first-quarter earnings forecast, reports Tim Paradis for the Associated Press. Shares of UPS are down 3.2% in midday trading.

The company is 7.4% of the iShares Dow Jones Transportation (IYT). Year-to-date, the fund is up 9.5%, and is still 4.9% above its 200-day moving average. Its other top holdings are Union Pacific (UNP, 13.1%), FedEx Corp. (FDX, 9.3%) and Burlington Northern Santa Fe Corp. (BNP, 9.2%).

The news only adds to concerns about the health of corporate earnings and the economy at large.

For full disclosure, some of Tom Lydon's clients own shares of IYT.

Will Southwest Reports Ground the Transportation ETF?

The transportation exchange traded fund (ETF) dipped slightly in midday trading after reports that Southwest Airlines (LUV) tried to hide safety problems emerged.

Federal Aviation Administration (FAA) inspectors contend that the airline tried to hide its problems within its maintenance program and even went so far as to keep out an inspector who noticed the problems, report Drew Griffin and Scott Bronstein for CNN. Shares for the airline fell as much as 2% midday.

Southwest, for its part, hasn't commented on the matter. But the news isn't the sort that would inspire confidence in travelers, some of whom may already be skittish about air travel. If they start looking for other airlines, it's undoubtedly going to hurt Southwest, which is 1.5% of the iShares Dow Jones Transportation Average (IYT). The fund is down 0.6% midday.

To date, IYT has been solid, up 10% year-to-date.

Other top holdings in the fund are Union Pacific (UNP, 13.1%), Fedex (FDX, 9.3%), and Burlington Northern Santa Fe (BNI, 9.2%).

For full disclosure, some of Tom Lydon's clients own shares of IYT.

Worldwide Growth Can Build Up Demand for Industrial ETFs

The PowerShares FTSE RAFI Industrials Sector (PRFN) exchange traded fund (ETF) could benefit from optimism in the industrial sector down the line.

How's that? Many of the companies in this fund's top holdings have a global reach, including General Electric (GE), which is far and away the largest holding in the fund at 18%. Another holding, Caterpillar (CAT), is up 10.6% year-to-date and makes up 2.6% of the fund. United Parcel Service (UPS), which is 4.1% of the fund, has an extensive global network. Developing markets in a growth spurt help fuel the demand for the products these companies offer and help offset the damage of a U.S. slowdown, reports Don Dion for Seeking Alpha.

The fund represents a wide range of sectors, including defense and aerospace, machinery makers, transportation and software.

The fund is down 4.6% so far this year, but if the sectors that it represents continue to post gains, this ETF could stage a turnaround. A prolonged recession in the United States, however, could pinch this ETF, while a global slowdown would really hurt. If this fund moves above its trend line (200-day moving average), it could be one to keep an eye on.

Transportation ETF Thinks It Can, It Thinks It Can

The transportation exchange traded fund (ETF) appears to be chugging along, and some are taking the movements as a good sign for the rest of the economy.

Gary Gordon for ETF Expert believes this sector is a key barometer for a stock recovery. Dow theorists use it to decipher the trends of bulls and bears. Transporting goods from one place to another is a fundamental driver for the economy, making Dow Jones Transportation Index Fund (IYT) a key ETF to watch.

Gordon points out that while the media has been focused on the financial and consumer sectors, transportation has quietly been delivering the goods. Year to date, it's up 7.5%. In the last week, it's up 9.3%.

When the damage to our economy finally begins to repair itself, the losers of 2007 (financials, consumer discretionary and transportation) will lead in the recovery efforts.

Caterpillar Down, But Big Growth Is Predicted; Will Industrial ETFs Feel It?

Shares of Caterpillar (CAT), a major component of the DIAMONDS Trust, Series 1 (DIA), pulled back from five-month highs yesterday. Caterpillar is 4.6% of the fund.

For two months, the company had been bulldozing to new records, up 22% in that time period. The blame for the turnaround is being placed with the transportation sector, as the iShares Dow Jones Transportation Average (IYT) fell 2.2%, reports Tomi Kilgore for Thomson Financial.

Caterpillar remains interesting, because it has so far been bucking the trend of the overall U.S. economic downturn. It's predicting record sales and profits for 2008, up 5% to 10% from 2007, reports Tony Reid for the Herald-Review.

Major construction projects in the United States, coupled with growing economies overseas, will be major contributors to the company's growth. Growth in markets such as energy and mining, in particular, will call for more of Caterpillar's equipment.

Caterpillar is also a component of the Industrial Select Sector SPDR (XLI), with 3.5% of its holdings.

Housing and Big Ticket Item Sales Drop, Taking ETFs With Them

More housing and consumer numbers came in today, affected real estate and retail exchange traded funds (ETFs).

The Commerce Department reported that new home sales fell in January by 2.8%. It's the slowest pace in 13 years. The median price of a home also dropped to $216,000, down 4.3% from December's median price, reports the Associated Press.

The slowing sales activity coupled with mortgage foreclosures is creating an inventory backlog, leading analysts to believe that the crisis is bound to get worse before it gets better.

In this time of belt-tightening and rising prices for oil and gas, a housing slump and credit squeeze, it's also not much of a surprise that consumers are holding off on purchasing big-ticket items. Orders dropped by 5.3% in January, the largest amount in five months, reports Martin Crutsinger for the Associated Press.

The numbers were worse than expected, and they cover a wide swath: commercial aircraft, autos, heavy machinery and computers.

Some ETFs that might feel the pinch as wallets are closed shut:

• iShares Dow Jones Transportation Average (IYT)
• SPDR S&P Retail (XRT)
• Consumer Discretionary SPDR (XLY)
• iShares Dow Jones US Real Estate (IYR)
  

Play Tenacious D With Your ETF Portfolio

Consider playing defense with exchange traded funds (ETFs) this year.

Thomas Smicklas on Seeking Alpha says he recently spent time with Air Force officers and is firm that the military is in need of a large system makeover and equipment rehab-program covering things from boots to space weapons to protect vital communication links in space.

Despite who becomes our next president in November, they must protect and defend our vital interests here and overseas. Technology is pressing ahead so that we must keep up with the pace, or risk sinking quickly. Kevin Baker noted earlier this month that defense is one sector in particular that stands to gain if John McCain takes the White House.

iShares Dow Jones US Aerospace and Defense Index Fund (ITA) is weighted 59% in aerospace and 41% in defense. And while defense is vital, Smicklas says, aerospace is where the action is in the future.

Boeing (BA) recently reported an increase in fourth-quarter profits, and a rush of order numbers could keep ITA and the other related ETF, the PowerShares Aerospace & Defense (PPA) flying high for some time.

Transportation ETF Flying High

The transportation exchange traded fund (ETF) is on a roll, as it was a leading issuer for the week. Dow Jones Transportation Average (IYT) issued $500 million or 74.8% of assets. Runners up were the UltraShort Financials ProShares (SKF) which issued $430 million, 28.9% of assets and the iShares Russell 1000 (IWB), which issued $264 million or 6.9% of assets. 

Charles Biderman for Forbes reports that U.S. equity ETFs redeemed $8.9 billion during the past week. Futures related ETFs redeemed $7.8 billion and non-futures related ETFs issued $614 million, while short ETFs issued $190 million.

Global equity ETFs issued $1.3 billion, while the leading issuer was iShares MSCI Emerging Markets (EEM) which issued $408 million. Other successes were iShares FTSE/Xinhua China 25 Index (FXI) at $218 million, and Vanguard Europe Pacific (VEA) which issued $91 million.

Boeing Earnings Lift Off Defense ETFs

Wall Street and related exchange traded funds (ETFs) were impressed by the 4% increase in fourth-quarter profits by Boeing Co. (BA).

Delays in the 787 Dreamliner program don't appear to pose a threat to performance. Dave Carpenter for Associated Press reports that the world's second-largest commercial jet maker is continuing to address problems with the first 787's and will slightly reduce 2008 revenue and deliveries estimates.

Boeing shares have taken off to $83.78 in midday trading. Boeing's net income for the last three months of 2007 was $1.03 billion or $1.36 per share, 4 cents higher than Thomson Financial analysts' expectations.

PowerShares Aerospace and Defense (PPA) has Boeing at 5.02% of assets and iShares Dow Jones US Aerospace and Defense (ITA) gives Boeing 8.44% of assets in the basket.

Transportation ETF Chugs Forward After Good News

Burlington Northern Santa Fe Corp. (BNI) reported strong earnings yesterday, boosting the transportation exchange traded fund (ETF) to a one-month high.

After the company reported fourth-quarter net income of $1.46 a share, the iShares Dow Jones Transportation Average (IYT) finished the day up 1.2%, its best performance since Dec. 31.

It's a Bird, It's a Plane, or Is It Defense ETFs?

The good news is that Boeing (BA) is doing so well that defense-related exchange traded funds (ETFs) might take off along with their order numbers. But the company might be doing a little too well.

Nicola Clark for the New York Times reports that in 2005 and 2006, Boeing and its rival Airbus, added a combined 4,000 contracts. That's equivalent to 4 years of production. In 2007, they added another three years to their backlogs.

Ordinarily, a rush of orders like that would be a good thing. But since the economy has slowed and may even slow further, there are now questions of whether the airlines will actually be able to take delivery of these new planes once they're built.

It's all up in the air, so to speak, but at least the airline industry returned a profit in 2007 for the first time in six years. That, in turn, gave several carriers the money to invest in bigger and better aircraft.

These defense and transportation ETFs could be worth keeping an eye on this year:

• PowerShares Aerospace & Defense (PPA), Boeing is 5.02%
• iShares Dow Jones US Aerospace & Defense (ITA), Boeing is 8.44%
• iShares Dow Jones Transportation Average (IYT)

Durable Goods Orders Affect ETFs

Orders for durable goods ticked up slightly for November, and a number of exchange traded funds (ETFs) could be affected by the news. The increase was small - only 0.1% - and well short of the hoped-for 2.2%. It was, however, the first increase in four months, so we'll take the good news where we can get it.

According to Jeannine Aversa at the Associated Press, there was increased demand for electrical equipment, appliances, automobiles, commercial airplanes and primary metals, including steel. Increases in those areas offset the lower demand for machinery, computers, electronics and defense aircraft.

Durable goods are defined as products that are expected to last at least three years.

The sales of U.S. goods to foreign buyers remains strong, thanks to the continuing weakness of the U.S. dollar.

Among the ETFs that could feel the effects of the report:

• Market Vectors Steel (SLX), up 87.8% year to date
• iShares Dow Jones US Aerospace & Defense (ITA), up 31% year to date
• Technology Select Sector SPDR (XLK), up 18% year to date
• iShares Dow Jones US Technology (IYW), up 18.1% year to date

Transportation ETF Takes a Hit After Earnings Projections

The Dow Jones Transportation Index (IYT) hit a three-week low after Union Pacific Corp. (UNP) lowered its outlook for the fourth quarter.  Union Pacific is 12.9% of IYT's portfolio. IYT is up 0.5% year-to-date.

It looks like the rising cost of fuel is affecting the transportation sector. Thomson Financial News reported that the railroad operator lowered its projected earnings to between $1.70 and $1.80 a share, down about 20 cents from a previous forecast. The company cited rising diesel costs and a lag in fuel surcharge recoveries.

Energy Bill's Reach Could Go Beyond Related ETFs

President Bush's signing of an energy bill will have implications beyond our fuel consumption and oil-related exchange traded funds (ETFs).

The law calls for an increase in vehicle fuel efficiency standards, more use of biofuels, such as ethanol, and more energy-efficient homes and appliances, reports Steve Hargreaves at CNNMoney.com. Refineries will be required to replace 36 billion gallons of gasoline with biofuel by 2022, and no more than 15 billion of those gallons can come from corn-based ethanol because of concerns about food prices.

The fuel industry is the most obvious industry that will be affected by the bill, but a ripple effect will likely be seen elsewhere as the changes are implemented. Automakers have long said that raising fuel economy standards would be costly. Will the bill drive up car prices as they feared? There is no auto ETF at the moment. And what will it do to the cost of air travel?

The cost of appliances could rise, too. But as socially conscious consumers replace their old appliances with new energy-efficient ones, it could increase spending. Increasing the use of corn-based ethanol could drive up the price of the commodity.

Some of the ETFs that could be affected by the bill include:

• PowerShares DB Agriculture (DBA), up 29.1% since January inception. Corn futures are 23.5% of the fund.
• U.S. Oil Fund (USO), up 39.8% year to date
• PowerShares Dynamic Oil and Gas Services (PXJ), up 33.7% year to date
• PowerShares WilderHill Clean Energy (PBW), up 52.4% year to date
• Energy Sector Select SPDR (XLE), up 30.5% year to date
• Dow Jones Transportation Index Fund (IYT), up 0.5% year to date

Market and ETF Facts to Consider

There's a lot going on in the markets and exchange traded funds (ETFs).  Matt Hougan for Index Universe looks at 10 interesting market facts and we've added some ETF related information.

1. The U.S. stock market is uneasy. Volatility is the best performing index this year, up 138.7% on the CBOE Volatility Index, compared to a year ago.
2. Technical analysis aside, the Dow Theory says "If the train slows down, the economy soon follows." iShares Dow Jones Transportation Average (IYT) is up 0.4% year-to-date.
3. Utilities are going off, as you may know from those huge checks you write each month. Utilities Select Sector SPDR (XLU) is up 15.7%.
4. Some indexes following Europe aren't as pretty as you may think, even with a strong currency.  Although we find the iShares S&P  Europe 350 Index (IEV) is up 14.7%. Isn't the euro worth more than gold right now?
5. European countries and their markets aren't always in sync. Performance ranges up and down, depending which country you're in. iShares MSCI Germany Index (EWG) is up 32% and iShares MSCI Belgium Index (EWK) is down 0.5%.
6. The China/Japan dichotomy, with such proximity, what gives? iShares MSCI Japan(EWJ) is down 1.3% and iShares MSCI Xinhua/China 25 Index (FXI) is up 66.9%.
7. Understanding contango in commodity investing is important.  It's confusing and has investors angry.
8. One of best domestic sector ETFs is Aerospace & Defense -PowerShares Aerospace and Defense (PPA) is up 24.6%. The worst sector is homebuilding - SPDR S&P Homebuilders (XHB) is down 53.4%.
9. Small-cap growth is doing well, maybe not as well as in recent past, but they are holding their own. iShares S&P SmallCap 600 Growth (IJT) is up 5.4%, compared to the S&P 500 which is up 3.6%.
10. Dividends aren't offering the safe haven thought of through tough markets. iShares Dow Jones Select Dividend Index (DVY) is down 6.0%.

Fasten Your Seatbelts: Airlines Failing To Help Transportation ETF

iShares Dow Jones Transportation Index (IYT) exchange traded fund (ETF) may take a ride this holiday season. The busy travel season is already underway and travelers are clogging the airports to get to grandmother's house.

But there's one unpleasant wrench in the machinery: increasingly, traveler's bags aren't making the trip with them. American Airlines (AMR), the biggest airline, began investigating the problem a year ago and their search led them to dirty printer heads, making bar codes hard to read, leading to misdirected bags, reports Jeff Baily for The New York Times. Regular wiping of the printer heads were implemented, with a 90-92% accuracy rate. A spokesperson for American said they never hit 100%, that 90% is acceptable. Try telling that to someone who is in theat unlucky 10%.

Most holiday travelers will agree: 90% doesn't sound good enough. What will this do for the transportation ETF, and related stocks? The choices are limited, especially for long trips are involved. Driving takes time and traffic can cause headaches. Gas is especially expensive.

Do you think more holiday travelers will just travel light and carry on?

Transportation ETF Moves Up Slowly but Surely

The iShares Dow Jones Transportation Index (IYT) exchange traded fund (ETF) has been hit-or-miss recently as rising energy prices take their toll. IYT jumped today, after Burlington Northern Santa Fe Corp., a railway operating service and one of the fund's top holdings, reported third-quarter earnings that beat analyst estimates. Shares of Burlington rallied 5% to $87.16. Revenue for the quarter rose to $4.07 billion, also above the $4.04 billion analyst estimate, reports Wanfeng Zhou for Thomson Financial.

Among the ETF's other heavily-weighted holdings that increased include shares of Union Pacific (UNP), FedEx (FDX), United Parcel Service (UPS), CSX (CSX), Con-Way and Norfolk Southern (NSC).

IYT was up 8% since the end of 2006. In comparison, the ETF that tracks the Dow Jones industrial average, DIAMONDS Trust, Series 1 (DIA) has gained 9.6% year-to-date. However, while many other indexes have rebounded nicely since the market low on Aug. 15, IYT has been a little slow, advancing only 3%.

Will Transportation ETF Continue to Chug Upward Despite High Oil Prices?

The transportation-based exchange traded fund (ETF) iShares Dow Jones Transportation Index (IYT) recently received news of strong earnings reports on top holdings. Currently, IYT is up 7.8% year-to-date.

Union Pacific Corp. (UNP), IYT's largest holding at 11.1%, said today that its third-quarter net income climbed 27% thanks to record shipping volume and revenue, as well as improved operating efficiency. UNP is the largest U.S. railroad operator. The company also said it expects to post earnings growth again in the fourth quarter, despite economic and fuel-price obstacles, as a result of continued pricing power and increased productivity, reports Stephen Wisnefski for Dow Jones Newswires.

CSX (CSX), another IYT holding that operates one of the largest rail networks in the U.S., had better-than-expected results that pushed the company's shares sharply higher yesterday. Shares of CSX rose 5.8% after the company said that its third-quarter earnings rose 24.1% to $407 million from $328 million a year ago, reports Andrew Farrell for Forbes. Some of the factors behind the increase included improved operations, an increase in on-time arrivals, decreased accidents and fast shipments.

Although these earnings reports are good news for IYT, we have to wonder how the record-high oil prices will affect the ETF. Will companies within IYT, such as FedEx (FDX) and Ryder Systems (R), be forced to raise their prices to compensate or will operating efficiency prevail?

Auto Stocks, the UAW Strike and Auto-related ETFs

With all the news surrounding the auto industry lately, perhaps it's better that there isn't an auto-related exchange traded fund (ETF). While the auto industry abroad is booming, the same cannot be said here in the U.S.

General Motors (GM) made headlines today as the first nationwide strike against the company in 37 years went into effect. The Union Auto Workers (UAW) said the reason for the strike was that workers want GM's promise that they will keep their jobs, reports Tom Krisher and Dee-Ann Durbin for the Associated Press. GM also made headlines with its signed deal with China to export Buick Enclave sport utility vehicles (SUVs) over a four-year period starting in 2008, the Associated Press reports.

As the U.S. seems to be stepping down as a leader in the auto industry, two foreign countries that are stepping up include Japan and Germany. Toyota (TM), Mitsubishi and Honda (HMC) are some of the holdings in iShares MSCI Japan Index (EWJ). Similarly, Diamlerchrysler (DAI) and Volkswagon are included in iShares MSCI Germany Index (EWG).

Record High Oil Prices Could Affect Transportation ETF

Many exchange traded funds (ETFs) have benefited from the record high oil prices. Oil futures and other energy futures increased today on expectations that the Federal Reserve will cut interest rates, reports John Wilen for the Associated Press. The benchmark federal funds rate reduction is likely to support the economy and ensure strong demand for oil and gasoline.

The iShares Dow Jones Transportation Average (IYT) is another ETF besides oil and energy-related funds that can be affected by the price of oil. While oil is up today, IYT is down. Think of moving goods via planes, trains and automobiles: You need gas to move them. As a result, these companies will pay more to move goods. As oil prices rise, remember all those shipping companies. Currently, IYT is up 5.8% year-to-date. However, it is below its long-term trend line (200-day moving average).

Optimism in U.S. Car Industry Shows Need for an Auto ETF

Currently, no automotive exchange traded fund (ETF) exists. Maybe it's because Asia has dominated the industry for years. Maybe the U.S. automotive factories that were shut down because of budget cuts is a factor. Who knows for sure? But some recent good news for the auto industry could change that.

General Motors (GM) reported "better-than-expected" earnings in the second quarter, according to Madlen Read for the Associated Press. The positive report helped boost GM's stock 2.9% yesterday. In addition, GM will release two new hybrid SUVs later this year, the Tahoe and the Yukon, that will get better mileage than the Prius, according to a Marketplace segment on American Public Media.

Is this enough optimism for ETF providers to create a U.S. auto manufacturing and supply ETF? Or even a broader global automotive-based ETF?

Transportation ETF Rides High

As the economy continues to grow at a moderate pace and promote the exchange of goods worldwide, transportation exchange traded funds (ETFs) benefit. One ETF experiencing a high and healthy performance is the iShares Dow Jones Transportation Index (IYT), which is up 17.3% year-to-date. Its holdings include railroads, trucking, shipping and airline companies.

IYT has had a strong performance most of the year, as you can see in the chart below. This indicates that even though oil is at $75 a barrel, it hasn't slowed down summer deliveries.

One High-Flying ETF - Aerospace & Defense (PPA) is on the Rise

The PowerShares Aerospace & Defense (PPA) exchange traded fund (ETF) is enjoying a sky-high performance lately. It's up 22% year-to-date.

One reason could be because Boeing recently made a lot of sales, and it's PPA's largest holding at 7%. Southwest Airlines ordered 25 jetliners valued at as much as $1.7 billion, according to Kansas.com. In addition, the U.S. army plans to extend its $162 billion Future Combat Systems program with Boeing, according to a Dow Jones press release.

Transportation ETF Up

The iShares Dow Jones Transportation Index (IYT) is a 23-stock exchange traded fund (ETF) that includes railroad, trucking, shipping, and airline companies.  Trang Ho for Investor's Business Daily reports analysts were already bullish on Burlington Northern Santa Fe (BNI) before Warren Buffet's Berkshire Hathaway recently bought 10.9% of the company.

BNI's business with coal, agriculture and intermodal are higher than other rail companies and these areas should perform well if there is an economic downturn.  BNI began a share-repurchase program and other railroad companies in the ETF are following suit. Railroad companies, BNI, CSX, Union Pacific (UNP) and Norfolk Southern (NSC) are among the top ten holdings in IYT, which is up 11.6% year-to-date.

Happy ETF Spring

It's officially Easter break and exchange traded funds (ETFs) are on nobody's mind. Whether you are on your way to a tropical locale or spending time with family, people and the Easter Bunny are on the move. iShares Dow Jones Transportation Average (IYT) is up 7.2% year-to-date, and with top holdings like FedEx (FDX) and Union Pacific (UNP), they're not carrying people, but they could be helping the Easter Bunny deliver all his eggs and baskets on time! Have a Happy Easter!

Transportation ETF IYT Moving On

The iShares Dow Jones Transportation Average (IYT) exchange traded fund (ETF) has reached new highs recently and is up this year 9.8%.  In an environment in which the price of oil has dropped 29% in the past four months, it is no surprise.  Kevin Baker of TheStreet.com reports that if transportation can confirm the industrials bullishness, then the sector can be seen as a barometer of economic activity.

Top holdings include: Fedex Corp (FDX) at 11%; Union Pacific (UNP) at 9% and United Parcel (UPS) at 8%.

Can Transportation ETF Benefit From Holiday Rush?

The transportation exchange traded fund (ETF) may be affected by whether or not you got your holiday packages out on time.  iShares Dow Jones Transportation Average (IYT) holds companies like United Parcel Service (UPS) and FedEx (FDX), together they make up about 20% of the ETF.  The fund is up 8% for the year.

FedEx handled a record 9.8 million packages last Monday, as shoppers wanted their packages delivered on time, reports Barbara Hagenbaugh of USA Today. This is 63% more than a normal Monday and up 10% from a year ago. 43% of shoppers planned to do online shopping with an increase in catalog sales, too.

BusinessWeek reports FedEx had strong second quarter earnings helped by lower gasoline prices. The company did warn of a tougher third quarter.  Hopefully, all of the holiday packages that were sent can help them out.

Transportation ETF (IYT) Bouncing Back

Over the last month, we have seen volatility in the markets.  There is one exchange traded fund that has bounced back, iShares Dow Jones Transportation (IYT).  This ETF is up 2% for the last month, 5% for the last 3-months and 14% year-to-date. 

Transportation ETF (IYT) Trucks Along Despite Higher Oil Prices

While the price of gas continues to rise, this hasn't slowed down the transportation sector.  The exchange traded fund, iShares Dow Jones Transportation (IYT) is up 11% year-to-date.  Carl Delfeld explains that the trade deficit is actually helping transportation.  All those goods that are coming into the U.S. (and moving all over the world) need to get there somehow.  IYT holdings include those companies that move goods around, Fed Ex (FDX), UPS (UPS), Ryder (R) and Union Pacific (UNP) are just a few.

These companies are doing well as they work to help companies cut costs through consulting and logistic services.  Railroads work to move imports from the ports to land locked distribution centers.

Road Rage - Transportation ETF (IYT) Moves Higher

The roads are more crowded than ever. Studies released on Tuesday reveal male drivers tend to waste 6 million hours a year on the road, simply because they do not ask for directions. It can't be all our fault, but the recovering economy has been great for truckers, railroads and air-transport companies.

Union Pacific (UNP), the nations biggest railroad company, raised the earnings outlook for the quarter and year based on stronger-than-expected freight volume.  UNP was up 6% on Wednesday.  UNP is one of the top holdings in the exchange traded fund, iShares Dow Jones Transportation Average (IYT).  The ETF was up 2% today, reaching a new high, as the top holdings in IYT all closed in positive territory.

Transport ETF (IYT) Has a Full Tank

iShares Dow Jones Transportation Average (IYT) jumped 2.5% today as trucking and railroad stocks advanced on positive earnings news. This was helped by oil prices falling more than $1 a barrel.

Profits surged at two of the nation's largest railroads in the fourth quarter, as a growing economy increased demand to move everything from coal to consumer goods.

Burlington Northern Santa Fe Corp., the nation's second largest railroad company, said Tuesday its fourth-quarter earnings rose 24 percent. CSX Corp., the largest rail operator in the eastern United States, said profits more than tripled from a year ago, a jump magnified by a year-ago loss from a business the company has since sold.

Transportation ETF Takes Off Following Lower Oil Prices

After oil prices reached highs this year, the price recently dropped from $70 to under $60 a barrel.  Though this may not be good for the oil and energy companies, the sector is Passing the Torch to other areas that can benefit from the lower prices. 

Transportation is one such sector.  Think about the brown UPS trucks you see everywhere, they run on gas.  No matter the price, the company needs to buy gas.  With lower oil prices, UPS can buy the same amount of gas at a lower rate.

iShares Dow Jones Transportation Average Fund (IYT) is an exchange traded fund that invests in transportation companies, like UPS, Fed Ex, Southwest Airlines and Union Pacific (railways).  The chart below illustrates the recent affect of lower oil prices on the transportation sector.

For purpose of full disclosure, IYT is part of our client accounts.