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Wall Street airlines - Airlines advance after profit reports - UPDATE 1
AFX
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SAN FRANCISCO (AFX) -- Airline stocks charged higher Wednesday after Continental Airlines and AMR Corp., American Airlines' parent, reported better-than-expected earnings but made clear that the burden of high jet-fuel prices remains a heavy one.
The Amex Airline Index gained 2% to 53.08 points.
As the most active stock, AMR Corp. shares gained 0.3% to $14.27 with volume of more than 7 million shares.
AMR Corp., parent of industry giant American Airlines, on Wednesday reported its first quarterly profit without the benefit of any special gains in four and a half years, overcoming higher prices paid for fuel.
J.P. Morgan downgraded AMR to neutral from overweight, however, on July 19, and upgraded Alaska Air Group to overweight from underweight, which rose 4.9% to $34.17.
'Alaska lacks the liquidity, pension, and labor overhangs facing many in the sector, yet trades at a significant discount to [low-cost carriers] and [legacy airlines],' wrote J.P. Morgan analyst Jamie Baker in the research note.
Continental Airlines reported a bigger-than-expected second-quarter profit on Wednesday as the carrier's cost cutting and strong revenue helped beat back rising fuel costs. Continental stock rose 0.4% to $15.76.
Delta Air Lines added 1.6% to $3.93 after the carrier named a new chief operating officer and a new chief financial officer.
Delta is set to report its second-quarter results on Thursday, along with Alaska Air Group.
Northwest Airlines slipped 1.3% to $4.57. Mediators released the airline and the Aircraft Mechanics Fraternal Association from talks, giving the two sides a 30-day window that could be followed by a strike by the union.
This story was supplied by MarketWatch. For further information see www.marketwatch.com.
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