Weekly Rail Traffic Data Supports Recovery (UNP, CSX, KSU)

Total U.S. rail freight traffic for the week ended August 21, 2010 rose 12.8% from last year. Total rail traffic was still down 5.4% from 2008 levels, however. Leading the way were shipments of metals (up 25.8%) and autos (up 22.4%). Intermodal shipments, which involves the transport of freight from one mode to another-such as rail to truck, rose 22.4% from last year. Looking at the four-week rolling average of freight traffic shows a 12.3% improvement from last year. Railroad shipments offer a timely gauge of economic activity for the variety of goods they haul. If consumer and business demand is robust, rail freight traffic should be strong. Shares of U.S. railroads are up today. Union Pacific UNP is up 1.76% to $73.35, CSX Corporation CSX is up 3.11% to $49.72, while Kansas City Southern KSU is higher by 2.03% to $33.69.