Airlines stocks rise
August 18, 2009 ·
Airline stocks rose modestly at midday Tuesday, gliding upward on gains in the broader stock indexes as investors recovered from the previous day’s sell-off.
An analyst at UBS raised his target prices on airline stocks, saying that July and August revenue at the carriers was a bit better than he had expected.
The Amex Airline Index gained 1.7 percent, with 11 of 13 component stocks rising.
Overall, stocks were helped Tuesday by better-than-expected earnings reports from some retailers and new figures on the housing market.
The Commerce Department said construction of single-family homes rose 1 percent — the fifth straight monthly increase — to the highest level since last October. That report was tempered however by an overall decline of 1 percent in homes and apartments.
At midday, the Dow Jones industrials were up 71.42 points, or 0.8 percent, at 9,206.76. The Standard & Poor’s 500 index and Nasdaq composite index also rose.
UBS analyst Kevin Crissey raised his target prices on seven airline stocks: AMR, Continental, Delta, US Airways, UAL, Southwest and AirTran. He predicted narrower 2009 losses — or in the case of Alaska Air, bigger profit — than he originally expected.
Crissey said there was a little strength in late-summer revenue trends but that corporate travel managers are still cautious about the rest of the year. Business travel is an important source of revenue for airlines and it’s been depressed all year.
Shares of Delta Air Lines Inc. rose 15 cents, or 2.3 percent, to $6.75 in midday trading. Shares of American Airlines parent AMR Corp. gained 16 cents, or 3.2 percent, at $5.12; United parent UAL Corp. picked up 18 cents, or 3.2 percent, at $5.81; and Continental Airlines Inc. rose 25 cents, or 2.2 percent, to $11.76.
Southwest Airlines Co. shares picked up 8 cents at $8.78; US Airways Group Inc. added 3 cents at $2.94; JetBlue Airways Corp. gained 9 cents at $5.19; Alaska Air Group rose 52 cents, or2.3 percent, to $22.92; and AirTran Holdings Inc. gained 7 cents at $6.43.
