Transport ETF Rallies Behind Rails

The iShares Dow Jones Transportation ETF ($IYT) is up 2.5% in early trading today on the back of a big move by the Railroad stocks. Leading the way is Kansas City Southern ($KSU) with a gain of 7.5%, pushing the ETF to a new all-time high.

The Dow Jones US Railroads Index is also closing in on an all-time high, suggesting to me the economy cannot be as bad any many believe considering the importance of moving goods on the rails.

The two rail stocks with the most attractive PEG ratios and charts are:

• Genesee & Wyoming ($GWR) - PEG of 1.08
• Union Pacific ($UNP) - PEG of 0.99