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Oil's Impact on 5 Transport Stocks

MINNEAPOLIS ( Stockpickr) -- With crude oil still above $110 per barrel, the concern for many is the impact on the consumer. That makes sense since the U.S. is a consumer-driven economy. Weakness on the consumer level could have huge negative consequences for this fragile recovery.

As such, the headlines tend to focus on things such as $4-per-gallon gasoline and the behavior changes that come with that price tag. We know that fewer long-distance trips will be taken this summer as a result. In addition, expect a big increase in demand for public transportation.

But what about the impact of higher oil prices on corporations? So far this earnings season, the early returns suggest that most publicly traded companies are beating expectations. That said, there are a few cracks in the recovery story.

Related: How to Trade Big-Name Oil Stocks

For example, Hooker Furniture (HOFT - Get Report) cited rising transportation costs negatively impacting its operating results. Shares dropped more than 5% after its report. Clearly there is a developing story here, and with oil reaching new highs each week, margins are likely to be lower going forward.


The transportation industry is rushing to transfer the expense to its customers, as evidenced by the Hooker report. Airlines are adding ticket surcharges seemingly every other week. For now transferring the cost of oil to the end user is working. How long that will last is anyone's guess.

The answer is critical for those investing in the transportation sector. Here's my take on five stocks in the industry.

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