Rail Traffic Skyrockets: Good For Railroad Companies

N. American rail traffic surged last week, the highest level it's been in since weeks. It jumped 111,000 rail cars to 687,000, and is now back up higher than the highest levels of 2010, which is a very strong sign for the economy going forward. Manufacturing and construction continue to lead the way, as sales from companies like Ford F and General Motors GM continue to be higher each month. We are on a run rate of 12.2 million new cars to be sold in this country, a level we haven't seen for a while. The data at this point seems to indicate a strengthening US economy, which is obviously beneficial for the rail road stocks like CSX CSX, Union Pacific UNP and Norfolk Southern NSC. All three of those names are higher this afternoon, and if this data is indicative of a trend for 2011, it would be surprise me to see higher share prices, as well as increased capex spending for 2011 by the major railroads, as they look to capture strong demand for services. Disclosure: no positions in names mentioned