dal

Analyst upgrades:

• Philip Morris (NYSE: PM) was upgraded to Outperform from Neutral at Credit Suisse.
• Friedman Billings upgraded shares of Principal Financial (NYSE: PFG) to Market Perform from Underperform as they believe the company's capital buffer could keep outrunning credit losses.
  
• Friedman Billings also upgraded Office Max (NYSE: OMX) to Outperform from Market Perform. The firm believes the risk of recourse to Office Max from the Timber Notes formerly backed by Lehman is low and that any litigation by noteholders will have a low level of success.
  
• Citigroup upgraded CF Industries (NYSE: CF) to Buy from Hold on valuation following the recent weakness but lowered their target to $113 from $128.
• Analog Devices (NYSE: ADI) was upgraded to Buy from Neutral at Merrill Lynch.
  
• Granite Construction (NYSE: GVA) was upgraded to Neutral from Sell at Goldman.
  

Analyst downgrades:

U.S. stock futures were much higher this morning, indicating markets could open with strong gains a day after the Federal Reserve cut rates by half a point to 1% and indicated further measures will be taken as necessary. While Wall Street ended mixed, global markets took this, as well as other measures central banks around the world have been taking, as a good sign and stocks in Asia and Europe rallied. However, at 8:30 a.m. this morning, advanced GDP for the third quarter will be released, and will likely show the economy has contracted for the first time. Economists expect GDP fell 0.5-0.6% in the quarter. Weekly jobless claims is also due at the same time.

Exxon Mobil Corp. (NYSE: XOM) - sometime before the opening bell, Exxon is scheduled to report third-quarter earnings. Much like other oil producers that have already reported, posting huge profits for the quarter due to record high oil prices, so is Exxon expected to report sharply higher profit.

Delta Air Lines (NYSE: DAL) - after the merger was approved Wednesday, Delta completed its $2.8 billion acquisition of Northwest Airlines (NYSE: NWA) on Wednesday to become the world's biggest carrier. Shares of both carriers surged 6% in after-hours.

Analyst upgrades:

• Calyon upgraded major network carriers based on falling oil prices and capacity cuts. The analyst is positive over the next 12 months but cautious short-term given the uncertain economy, and volatile markets and oil prices. AMR Corp (NYSE: AMR) and Delta Air (NYSE: DAL) were upgraded to Add from Neutral and UAL Corp (NASDAQ: UAUA) was raised to Neutral from Reduce.
• Ryanair (NASDAQ: RYAAY) was upgraded at Citigroup to Buy from Hold.
• Boardwalk Pipeline (NYSE: BWP) was raised to Buy from Hold at Deutsche Bank.
• Cowen lifted Biogen Idec (NASDAQ: BIIB) to Outperform from Neutral.
• JP Morgan upgraded Choice Hotels (NYSE: CHH) to Neutral from Underweight following the better-than-expected Q3 report.
• Oppenheimer upgraded shares of Integra LifeSciences (NASDAQ: IART) to Outperform from Perform on valuation, the company's minimal exposure to economic conditions, and expectations for margin improvement and a rebound in organic growth.

Analyst downgrades:

• Sherwin-Williams (NYSE: SHW) and AerCap Holdings (NYSE: AER) were downgraded to Neutral from Overweight at JP Morgan.
• UBS downgraded Embarq (NYSE: EQ) to Neutral from Buy following the CenturyTel (NYSE: CTL) merger announcement.

Today was another relief trading day on word that Congress has reached a tentative approval of a bipartisan $700 billion financial bailout package. It definitely wasn't from the slew of bad economic data this morning. That was just ugly. Despite poor economic data, bond yields rose as the bailout package will end the flight to quality we witnessed lately.

Below are today's unofficial closing bell levels:
DJIA 11,022.06 +196.89 +1.82%
NASDAQ 2,186.57 +30.89 +1.43%
S&P500 1,209.18 +23.31 +1.97%
10YR T-Note 3.862% +0.091%
52-week lows
Top Analyst Calls

American International Group (NYSE: AIG) was up most of the day, but ex-Chairman Hank Greenberg filed to sell shares in the open market because of personal liquidity issues. Shares were up 19% but had fallen all the way down to almost 10% at $2.97 on this news. So much for him putting together a hostile rescue package of his own.

Boston Scientific (NYSE: BSX) was up almost 3% at $12.96 right before the close after it received marketing approval from the FDA for its TAXUS Express2 Atom Paclitaxel-Eluting Coronary Stent System this morning. This stock is so far down from prior highs that any good news is welcome.

General Electric Co. (NYSE: GE) managed to gain 4% to $25.60 right before the close despite its earnings warning hitting the stock early today. This was already factored in and should have been anticipated. It is keeping its AAA debt rating, keeping its dividend, and suspending buybacks to preserve liquidity.

Northwest Airlines Corporation (NYSE: NWA) and soon to be parent Delta Air Lines (NYSE: DAL) approved their merger today with something around 98% to 99% of the votes combined in favor of the deal. Unfortunately it had no bearing on the stocks, as Northwest shares were actually down 1% at the close.

In the News:

U.S. stock futures were higher earlier this morning, as investor continued to watch the debate over the $700 billion bailout plan following President Bush's speech Wednesday when he warned "Our entire economy is in danger." But then General Electric cut its earnings estimates and futures began coming off highs. Now it seems stocks could start the day mixed. Also on tap today are data on durable-goods orders and new-home sales for August, as well as the weekly initial jobless claims number.

General Electric Co. (NYSE: GE) has lowered its outlook for third-quarter and full-year earnings, citing "unprecedented weakness and volatility in the financial services markets." The new guidance is far below analyst estimates. GE has also reaffirmed its commitment to maintaining a 'AAA' credit rating, and is taking steps to bolster its capital and liquidity position including suspending the current GE stock buyback, but not touching the dividend. GE shares are down nearly 5% in pre-market trading.

Delta (NYSE: DAL) and Northwest (NYSE: NWA) shareholders are to vote Thursday on the proposed deal to combine the two. The votes are expected to overwhelmingly back the deal. With that, the airlines will then need

Few actors understand the pluses and minuses of hedging better than traders . . . and airlines. In an ironic twist, some airlines could be financially hurt by falling oil prices. That's right: hurt by falling oil prices.

United Airlines (NYSE: UAUA) is one such airline. United said it could lose up to $294 million in Q3 if oil prices average $95 per barrel, marketwatch.com reported Wednesday. Oil rose $2.44 to $109.05 in mid-day Wednesday trading. United purchased fuel caps averaging around $111 per barrel this year and $118 for 2009. In other words, the caps mean United would be compelled to pay more for oil than the market price, due to the established contracts.

American Airlines (NYSE: AMR), and the slated-to-merge Northwest Airlines (NYSE: NWA) / Delta Air Lines (NYSE: DAL) are other carriers that could be hurt by oil hedges, marketwatch.com reported.

Hedges, caps: An attempt to create fixed expenses

Stock Analyst C. Leonard Bauer told BloggingStocks Wednesday most airlines "merely seek to break even with their fuel hedges and caps, not profit from them."

Analyst upgrades:

• UBS believes US airlines estimates are too low and will move higher. The firm upgraded AirTran (NYSE: AAI), AMR Corp (NYSE: AMR), Continental (NYSE: CAL), Delta (NYSE: DAL) and Northwest (NYSE: NWA) to Buy from Neutral and JetBlue (NASDAQ: JBLU) to Neutral from Sell.
  
• JMP Securities upgraded DealerTrack (NASDAQ: TRAK) to OUtperform from Market Perform as they believe 2H08 guidance represents a floor and that 2009 estimates are achievable, among other reasons.
• Potash (NYSE: POT) and Mosaic (NYSE: MOS) were raised to Buy from Hold at Soleil.
  
• Argus upgraded Seagate (NYSE: STX) to Buy from Hold on Friday.

Analyst downgrades:

• Jefferies downgraded Citrix Systems (NASDAQ: CTXS) to Underperform from Hold as they do not see a catalyst for the company to grow into 2009 consensus estimates. The firm lowered their target price to $25 from $32.
  
• Citigroup said following Lehman's (NYSE: LEH) bankruptcy, they expect a distressed-sale of American International's (NYSE: AIG) MBS portfolio, resulting in the worst quarter yet for the company. Shares were cut to Hold from Buy.
• D.R. Horton (NYSE: DHI) was downgraded to Sell from Hold and Pulte Homes (NYSE: PHM) was downgraded to Hold from Sell at Citigroup.
  
• Merrill downgraded Goldman Sachs (NYSE: GS) to Neutral from Buy and JP Morgan (NYSE: JPM) to Underperform from Neutral.

AeroVironment (NASDAQ: AVAV) is engaged in the design, development, and production of unmanned aircraft systems (UAS) and electric energy technologies for various industries and governmental agencies. The company's small aircraft are used by U.S. Department of Defense customers to deliver real-time reconnaissance, surveillance, and target acquisition to tactical operating units. Its electrical products include recharge systems for industrial vehicle batteries and power processing test equipment. Ford Motor (NYSE: F) and Delta Air Lines (NYSE: DAL) are on the company's commercial customer list. Lockheed Martin (NYSE: LMT) is a major competitor.

The firm pleased investors last week, when it reported fiscal Q1 EPS of 22 cents and revenues of $53.6 million. Analysts had been expecting 18 cents and $49.9 million. Management also maintained its FY09 guidance for year over year revenue growth of 20%-25%, with an operating income margin of 12%-14%. The CEO noted, "Winning the All Environment Capable Variant competition with our Puma AE earned us the fourth Department of Defense program of record for small UAS."

U.S. stock futures were mixed on Tuesday. Following Monday's broad sell-off and volatile session, which was also marked by low volume, today might not be different -- volatile and low volume. Several reports are in focus today, specifically some housing data that could shine more light on the sector, and consumer confidence, which could also move stocks. Meantime, oil prices declined and the dollar strengthened against major currencies.

Rio Tinto (NYSE: RTP) shares are down over 3% in premarket trading after the mining giant reported fiscal first-half profit more than doubled. RTP's acquisition of Alcan and soaring commodity prices helped Rio achieve the results. RTP shares have been declining due to worldwide slower growth.

Meanwhile, Anadarko Petroleum (NYSE: APC) shares were 2.4% higher in after-hours after it announced a plan to buy back up to $5 billion of stock.

Staying with share buybacks, Coach (NYSE: COH) are also 1.7% higher in premarket trading after announcing a buyback program of up to $1 billion, which follows the completion of a similar repurchase.

And of course, Lehman Brothers (NYSE: LEH). Shares of the embattled banker are rising this morning following speculation that Kohlberg Kravis Roberts may be interested in buying Neuberger Berman, according to CNBC, while Blackstone Group backed away.

In the News
The Best ETFs
With 800 choices, you can't just throw darts. Kiplinger picks great ETFs in 13 categories.
Getting Past the ETF Clutter - Kiplinger.com

How the World Spends Its Money
Ever wondered how global consumers spend their hard-earned incomes? Data from the World Bank's most recent study breaks global individual consumption into 11 buckets--from food and clothing to health care and recreation. While just 6% of U.S. income goes to food China residents spend 24% and Ethopians a whooping 55%. At the other extreme, Americans spend 18% of its income on healthcare, which is much higher than most other countries.
How The World Spends Its Money - Forbes.com

These days in commercial aviation, airlines are finding ways to operate more efficiently amid the toughest sector conditions since the first oil shock in 1973-74.

And while there's no love lost between passengers and the major carriers' unconventional way of increasing total consumer flying costs by adding separate baggage fees, there's one a-la-carte fee the public may be willing to pay for: a fee for internet access on airplanes.

Delta Air Lines (NYSE: DAL) announced it will start offering broadband internet service on domestic flights as early as October, The Washington Post reported Wednesday. Other airlines, including Continental (NYSE: CAL), Southwest (NYSE: LUV), and Virgin America are planning or testing internet services. (Delta will merge with Northwest Airlines (NYSE: NWA), pending U.S. Justice Department approval.)

Analysts generally credit JetBlue (NASDAQ: JBLU) with raising coach class amenity standards for flights in the United States when it introduced satellite TV and other services on its flights.

Delta's service will cost a $9.95 flat fee for flights lasting three hours or less and $12.95 for flights longer than three hours.

Public seen receptive to Wi-Fi fee

Stock analyst and frequent flier C. Leonard Bauer says Internet fees would be "a lucrative revenue stream" for the airlines, and ironically one that will probably be popular with the public.

"If there's one sector that stands to benefit handsomely from a further slide in oil or, at least, a moderation in crude's rally: the airlines," explains energy sector expert Elliott Gue.

In The Energy Strategist, he says, "Airlines may make a terrible long-term investment but can be an outstanding short-term trade." Here he looks at Delta Air Lines (NYSE: DAL) and, for the even more speculatively-inclined, US Airways (NYSE: LCC).

"Some investors will rightfully cringe from any mention of this sector; after all, the airlines have consistently lost money throughout their post-deregulation history.

"Most of the majors have declared bankruptcy on multiple occasions since that time. However, we've traded the airlines on a few occasions; we took some triple-digit percentage gains in the airlines back in 2005.

"The airlines' leverage to oil prices is well known. Expectations are so low, in fact, that several major air carriers actually managed to beat consensus expectations in the second quarter.

"And although sentiment is already at rock-bottom, there's a real basis for cautious optimism. First, if I'm right about oil, fuel costs won't rise appreciably in the third quarter. This huge headwind is dissipating.

These are tough economic times for the nation, most would agree, and one hard-hit sector has been the airline sector, specifically the major carriers.

Surging fuel costs, the increased precautions and reviews required for the post-September 11 era, and intensifying competition for international routes has led to large losses among many major carriers - - a condition that has forced them to raise fares and implement other cost-cutting changes.

Most have also instituted a baggage fee for a passenger's second bag, with some carriers charging for all bags. Still, for the most part travelers have taken the baggage fees in stride. Although viewed as a nuisance by many travelers, the reality is a second bag, in particular, is optional weight that increases flying costs per mile. And with aviation fuel zooming past latte-price levels, that's no significant expense.

Still, US Airways Inc. may have gone one too far with the fee system. Effective today, US Airways will start charging for water on flights by coach passengers, The Wall Street Journal reported Friday (subscription required). Bottled water will be $2. Passengers flying first class are exempt from the extra fee.

In the News:
4 Companies With Strong Cash Flow
These four are in a good position to withstand the slowing economy. They include Boeing, IBM, Johnson & Johnson and VF Corp.
Four Companies With Strong Cash Flow - SmartMoney.com

Securing Your Dream Retirement
Planning for retirement takes as much time as planning a vacation. Plan the ultimate vacation. The key is making the right choices. Here is your guide to put you on the right path.
Control your destiny - Bankrate.com

Airlines Sell Frequent-Flier Miles for Fast Cash, Travelers Be Wary
Airlines searching for extra cash to survive their deepening financial crisis are finding out just how valuable their frequent-flier programs really are. Travelers, however, could see the value of their frequent-flier miles eroded by such deals, especially since all those extra miles will be hitting the market as airlines begin shrinking capacity dramatically.
Airlines sell frequent-flier miles for fast cash - USATODAY.com
In the News: Delta Redoes Mileage Plan for Its Fliers