(Updates throughout to reflect Dow transports also closed at a record high)
By Lewis Krauskopf
NEW YORK, July 3 (Reuters) - U.S. market watchers on Monday received a bullish sign to kick off the second half of the year as the closely followed Dow transports set record highs for the first time since March 1.
The Dow Jones Transport Average index, which includes airlines, railroads and package delivery companies, is often viewed as a barometer of economic activity.
The 20-component index eclipsed its March 1 intraday record of 9,639.33, rising as high as 9,681.88 during the session. It also tallied its first closing high since March 1, finishing at 9,639.63, up 0.8 percent on the day.
"If people are looking for validation that the economy is still on pretty solid footing and can continue to kind of accelerate, that’s a good sign to see,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana and a contributing editor to the Dow Theory Forecasts newsletter.
Dow Theory tracks the transports and the Dow Jones Industrial Average to confirm major trends in the stock market.
While the Dow industrials have been setting successive record highs over the past six weeks, the transports slumped after March 1 and only recently surged back to record territory.
A new closing high for the transports reconfirms the bull market trend, which "emboldens investors to buy the dips," said Carlson.
Among the stocks giving the index the biggest lift on Monday were freight and logistics company Landstar System Inc , trucking and transportation logistics company J.B. Hunt Transport Services Inc and railroad Norfolk Southern Corp.
The transports' record surge, on a shortened trading day ahead of the July Fourth holiday, came on a generally higher day for the broader market. The benchmark S&P 500 rose 0.2 percent and the Dow industrials gained 0.6 percent, while a decline in the technology sector dragged the Nasdaq Composite 0.5 percent lower.
The Dow industrials' 8 percent rise in the first six months of the year marked their best first-half performance since 2013. (Reporting by Lewis Krauskopf; Editing by Dan Grebler and Jonathan Oatis)