Sector Snap: Airlines fly with broader market

NEW YORK — Shares of U.S. airlines rose in Monday trading, following the broader market higher on better-than-expected economic data, including manufacturing, consumer spending and construction spending.

Investors took the expected General Motors bankruptcy filing in stride and joined ranks with overseas markets to march to higher ground.

The AMEX Airline Index gained 5.4 percent with all 13 component stocks up.

Crude oil rose $1.16 to $67.47 a barrel on the New York Mercantile Exchange. Jet fuel is one of the airlines’ biggest expenses.

Upbeat reports from analysts gave airline shares a good tail wind. Kevin Crissey of UBS Investment Research said investors are “sniffing around the U.S. airline stocks with a short-term upward bias. Most agree that airline financials are troubling, particularly with fuel prices rising, but few that we

Crissey likes airline stock in the very near-term, but says he is concerned about the revenue outlook after May.

Stifel Nicolaus & Co. analyst Hunter Keay upgraded Delta Air Lines to “Buy” from “Hold.”

“We don’t know what the economy will look like at year end, and if premium traffic continues to decline at current levels we believe some airlines could face serious liquidity pressures. But we believe Delta is not among those airlines,” he wrote in a note to investors.

Keay said Delta could benefit from a “buy the survivor” scenario if weaker competitors face a liquidity crisis.

Delta was among the biggest sector gainers in midday training, rising 61 cents, or 10.5 percent, to $6.42. AMR. Corp., parent of American Airlines gained 30 cents, or 6.7 percent, at $4.75. Continental Airlines, which reports May traffic later today, added 88 cents, or 9.4 percent, at $10.20. US Airways rose 36 cents, or 14 percent, to $2.94. UAL Corp., parent of United Airlines, gained 33 cents, or 7.1 percent, at $4.98.

Alaska Air added 39 cents, or 2,5 percent, at $15.96. AirTran rose 29 cents, or 5.7 percent, at $5.36. JetBlue Airways gained 37 cents, or 8.2 percent, at $4.90. Southwest Airlines added 20 cents, or 3 percent, at $6.94. SkyWest rose 63 cents, or 6.2 percent, to $10.86.