NEW YORK — What’s not to like about Dow 13,000?
While some investors cheered when the blue-chip index closed above that level Tuesday for the first time since May 2008, some were wringing their hands. The Dow Jones industrial average has left the Dow transportation average behind, and that could mean trouble.
“There’s a risk that stocks could slide,” said Bruce Mc-Cain, chief strategist at Key Private Bank.
Added Dennis Slothower, editor of the investor newsletter Stealth Stock Daily: “When the Dow leads everything else, that’s not a healthy sign.”
The rap on the Dow is that it tracks the biggest, most financially stable companies. Technical analysts, who study previous stock movements to anticipate future ones, say you have to look at other indexes too.
Take the Dow Jones transportation average, the granddaddy of indexes, which traces its origins to 1884. It tracks railroads, shipping companies and airlines — the businesses that move people and goods through the economy.
This collection of 20 stocks fell 3 percent in February, counting reinvested dividends, while the better-known Dow Jones industrial average rose 2.5 percent. Since last April, the high for most indexes last year, the transports have dropped 6 percent, compared with a 1.2 percent gain for the Dow.
Technical analysts say that if one index reaches a high and the other doesn’t, that means the rally could falter. They say that’s what happened before stocks tanked in 1929, 1937 and 2000.
Analysts disagree over how much to worry now. And the Dow is not the only index climbing fast. A day after the Dow closed at 13,005, the Nasdaq composite index of technology stocks briefly broke through 3,000 for the first time in 11 years.
Still, there are worrisome signs besides transportation stocks that the rally might not last:
• The price of gas is up too. The average for a gallon of unleaded is $3.74, the highest on record at this time of year. Some investors think gas prices are the biggest threat to the rally because when people pay more at the pump, they often spend less elsewhere.
• The Russell 2,000 is still off its high. The popular index of smaller stocks, the kind of iffy outfits that surge when investors feel like taking big risks, has rallied 8 percent this year but is still 6 percent below its high of last April 29.
• Traders are scarce. About 4 billion shares are trading every day on the New York Stock Exchange, compared with about 4.4 billion last year. That suggests investors aren’t buying with much conviction.
• Main Street still isn’t bullish. Investors pulled $137 billion from U.S. stock mutual funds from June through January, according to Strategic Insight, an industry consulting group.
Not everyone is convinced that we’re at a turning point now and that the rally could falter.
Fred Meissner, the writer of the Fred Report, an advisory service for technical investors, doesn’t think so. He said the transports, far from lagging the Dow in hitting a high, are actually leading the Dow.
It depends, he said, on how you define lagging and leading. He said he thinks the two indexes are basically hitting highs together. The transports just hit their high earlier — an all-time record of 5,618.25 in July.
“I would be buying stocks here,” he said.
