Reply #43: Sector Wrap: Airline Stocks Rise [View All]

[citizen snips]

NEW YORK (AP) -- Airline stocks closed modestly higher Tuesday, as falling crude oil prices helped the industry push past the latest round of analyst downgrades.

The Amex Airline Index added more than half of 1 percent to close at 49.74, with eight of its 11 component stocks rising. Helping shares was a barrel of oil dropping $1.25 to $64.46 on the New York Mercantile Exchange. Jet fuel is one of the industry's top costs.

The easing fuel-price pressures helped the index rebound from earlier losses, sparked by UBS analyst Kevin Crissey's downgrade of much of the industry on worries of weakening domestic demand and rising fuel prices. Like J.P. Morgan analyst Jamie Baker last week, Crissey acknowledged in a research report that "we missed it," as industry stocks have been skidding since mid-January.

"We have been bullish and clearly missed a big drop in the sector," he wrote in a note to investors, pointing out that the early part of the drop stemmed from higher jet fuel prices, but recent declines are a function of airlines' warning of a softening domestic market.

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http://biz.yahoo.com/ap/070501/airlines_sector_wrap.html?.v=1