Andrew Bary
The Dow Jones Transportation Average is one of the top U.S. equity indexes this year with a 34% gain through Monday, and it owes much of the move to one stock -- Avis Budget Group.
Avis stock was up sevenfold through Monday to $609 a share, and its advance accounted for 52% of the index's gain to a record level of 23,332.
Avis shares have been propelled higher in the past month by a giant short squeeze as two investors, SRS Investment Management and Pentwater Capital Management, control over 100% of Avis shares, including stock ownership and total return swaps that are equivalent to stock.
Avis shares are up another 13% to $686 Tuesday and that is lifting the Dow Jones transports by 2%. Avis accounted for 17% of the index on Monday's close and it likely will have a higher weighting on Tuesday's close if its stock-price gain today holds.
The 20-stock Dow Jones Transportation Index, like the better-known Dow Jones Industrial Average, is price weighted. That means that moves in high-price stocks power the index up and down. Avis is by far the highest-priced stock in the index. Each one-point move in an index component moves the average by more than six points.
The next highest-priced stocks are FedEx at around $400 and Norfolk Southern at about $300 a share. If the index were weighted by market value, Avis would have a much lower weighting. Its market value is now about $24 billion, smaller than stocks such as Union Pacific, at around $150 billion. Union Pacific now has half the weighting of Avis in the index because its share price is around $250.
The distortion caused by the rise in Avis makes the transport index a somewhat less reliable gauge of the economy.
Many investors -- especially old-timers -- see the transportation average as an economic bellwether, since so many goods travel by truck or rail. And air travel is a good gauge of consumer health and sentiment. Some look for new highs in the Dow Jones Industrial Average to be confirmed by the Dow Jones Transportation Average.
Almost all the upward move in the transport average has come in the past month, coinciding with Avis's run-up.
Dating back to 1896, the Dow Jones Transportation Average is one of the oldest U.S. equity indexes and used to consist of railroads when they were the dominant means of transportation in the country.
Write to Andrew Bary at andrew.bary@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 21, 2026 16:36 ET (20:36 GMT)
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