An exchange traded fund indexed to the Dow Jones Transportation Average (NYSEARCA:DIA) has fallen sharply in the recent stock pullback and is another sign the economy is hitting a soft patch.
WSJ.com’s MarketBeat reports that the breakdown in the transportation index has been worse than the Dow industrials and shows investors are worried about a recession.
The iShares Dow Jones Transportation Average ETF (NYSEArca: IYT) is down about 20% over the past month.
“The transports are an economically sensitive index and a leadership group so a breakdown says investors continue to price in a recession,” said Bank of America Merrill Lynch technical analyst Mary Ann Bartels, according to the MarketBeat report.
The iShares Dow Jones Transportation Average ETF rose 3% in Tuesday’s rally in stocks.
iShares Dow Jones Transportation Average ETF - (click chart to enlarge)
Max Chen contributed to this article.