While this earnings season started out as a whimper for some, it’s a boom in one of the most cyclical parts of the U.S. stock market.
Thanks to better-than-expected results from CSX Corp. and United Continental Holdings Inc., the Dow Jones Transportation Average rallied 2.3% as of 1:46 p.m. in New York on July 18, poised for the biggest rally in three months.
All 20 members gained, lifting the benchmark to its highest level since June.
The strength echoed FedEx Corp.’s surge last month, when the package delivery company rode an e-commerce boom and a manufacturing rebound to deliver better results.
It marks a vote of confidence in the economy whose outlook has been recently clouded by global trade tensions. As a bellwether industry with a finger on the pulse of commerce, results are the latest indication that the drama surrounding trade policy has done little to dent the need for the exchange of goods and services.
CSX jumped as much as 7% as the railroad operator beat the highest analyst estimate for profits. Better-than- expected volume for export coal and robust pricing drove earnings while years of cost reductions paid off. United Continental rallied almost 10% as the airline raised its profit outlook, easing investor fears that rising seat supply would outstrip demand.