The rails sector is on high alert following reports that Union Pacific (UNP) is focused on acquiring Norfolk Southern (NYSE:NSC), which could create the nation's first coast-to-coast rails network if the deal cleared regulatory and White House scrutiny.

Union Pacific is in talks to merge with Norfolk Southern, according to The Wall Street Journal, in a deal that would shake up the railroad business in America.The Journal cited people familiar with the matter.

The report by news website Semafor said Union Pacific, which operates in 23 western states, was working with investment bankers at Morgan Stanley to pursue a deal with one of the two major eastern railroads, CSX or Norfolk Southern. Union Pacific CEO Jim Vena has made public comments of his interest in creating a transcontinental railroad.