Airline stocks rebound despite weak traffic report from Delta

Sector Snap: Airline stocks rise

DALLAS — Shares of U.S. airlines rose for the second straight day on Tuesday, as Continental Airlines Inc. reported a big jump in January traffic, further evidence of a recover in travel demand.

The Amex airlines index gained 1.9 percent, with 12 of its 13 components higher in morning trading.

As on Monday, airline stocks were helped by a rally in the broader market. By late morning, the Dow Jones industrial average gained 69 points to above 10,254 and other indexes rose after a report that pending home-sales contracts increased 1 percent in December.

Oil prices rose again, with benchmark crude for March delivery up 81 cents to $75.24 a barrel in morning trading on the New York Mercantile Exchange.

Continental was the first major U.S. airline to report January traffic, and it said passengers flew 8.5 percent more miles last month than they did a year ago. Revenue per available seat mile — a closely watched indicator of pricing power and financial performance in the airline industry — fell between 1 percent and 2 percent from a year ago. That was a smaller decline than in previous months and was better than many analysts had expected.

In morning trading, Continental shares rose 65 cents, or 3.4 percent, to $19.94.

Shares of United Airlines parent UAL Corp. gained 72 cents, or 5.7 percent, to $13.47; Delta Air Lines Inc. added 44 cents, or 3.5 percent, to $13.07; American Airlines parent AMR Corp. picked up 23 cents, or 3.1 percent, to $7.65; Southwest Airlines Co. gained 5 cents to $11.62; and US Airways Group Inc. gained 29 cents, or 5.2 percent, to $5.89.