One 'Lettter' Stocks Offer Opportunity Several companies with single-letter ticker symbols currently offer potential for value investors, says George Putnam. The editor of The Turnaround Letter stock publication highlights a number of single-letter stocks that have been "beaten down pretty badly and now look particularly appealing." They include Agilent ('A'), Citigroup ('C'), Ford Motor ('F'), Kellogg ('K'), Macy's ('M'), NetSuite ('N'), Qwest ('Q'), Spring Nextel ('S') and AT&T ('T'). 'Singular' values: A, C, F, K, M, N, Q, S, T - BloggingStocks
August Trading Strategies August is traditionally one of the worst months for the market. Against an already volatile backdrop, Experts show you 12 ways to navigate the dog days of summer. http://www.marketwatch.com/newscommentary/tradingstrategies
What's holding the airline sector back, in addition to high jet fuel prices, and keeping the likes of AMR's (NYSE: AMR) American, Delta (NYSE: DAL), UAL's (NYSE: UAUA) United, Southwest (NYSE: LUV), and Continental Airlines (NYSE: CAL) from realizing their potential?
Many economists and analysts would agree that, along with other infrastructure and related investments, the nation's air traffic control system must be upgraded, if the United States seeks an air transportation system capable of maintaining a high level of safety -- and better service -- in the 21st century's more-crowded skies.
Further, that the United States has not already replaced an essentially generation-old air traffic control technology with a modern system is a serious demerit, and one that has -- through delays, cancellations, and other problems -- taken a toll on the flying public and the major carriers.
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.
American International Group (NYSE:AIG) Raised to Buy at Banc of America, according to 24/7 Wall St. The financial news site also reports Nike (NYSE:NKE) Cut to Neutral at HSBC.
UBS upgrades AMR (NYSE:AMR) to Neutral from Sell, according to Briefing.com.
Today was a clear win for the bulls, although the bears aren't forgotten by any measure. Oil fell another $4.00 today and to around $134/barrel. The CPI report also came in less timid than some PPI watchers were expecting, although it is still very high. Today's rally is probably more attributable to pricing action in banking and transportation stocks. Even the stodgy FOMC minutes didn't hurt today.
Below are the unofficial closing bell levels for index levels today:
Airline earnings came out very cautiously but not as bad as many would have guessed and didn't have the ring of any immediate death sentences for the industry. AMR Corp. (NYSE: AMR), the parent of American Airlines, managed to post better than expected gains before items even if its losses were near $1 billion. Its shares were up over 33% at $5.90 in today's final minutes. This may have actually been the best day ever for major airline stocks.
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AMR Corp. (NYSE: AMR), the parent of American Airlines, expects to record a non-cash charge of nearly $1.3 billion in the second quarter, the company said in a filing with the Securities and Exchange Commission. The company also indicated it may cut nearly 7,000 jobs, or 8% of its workforce.
A federal judge in New York ruled Tuesday that Google Inc. (NASDAQ: GOOG) doesn't have to turn over source code for the search function in its YouTube video service as part of an ongoing $1 billion copyright-infringement lawsuit filed by Viacom Inc. (NYSE: VIA), but it does have to turn over records of every video watched by YouTube users, including their login names and IP addresses, be turned over to the entertainment giant. If this doesn't seem like a consumer privacy violation, I'm not sure what is.
Meanwhile, Apple Inc. (NASDAQ: AAPL) is also encountering some law suits. This time CEO "Steve Jobs and other managers were accused in an investor lawsuit against the company of backdating stock-option awards to maximize their personal profit." According to Bloomberg, Shareholder Martin Vogel and co-plaintiff Kenneth Mahoney said in the new complaint that Apple executives hid the cost of the backdated options from shareholders, leading the company to file false financial statements.
According to people familiar with the situation, the Wall Street Journal reported that Yahoo! Inc (NASDAQ: YHOO) is again talking to Time Warner Inc (NYSE: TWX), this time about taking over AOL, with Time Warner taking a stake in the combined entity. News Corporation (NYSE: NWS) has its eye on any Yahoo moves. Meanwhile, Microsoft Corporation (NASDAQ: MSFT) is considering what its next move against Yahoo might be and is talking to News Corp.
The Wall Street Journal also reported that, as part of the company's plan to cut costs, Tribune Co's Los Angeles Times newspaper may look to cut about 250 jobs, including about 17% of its news staff.
The Financial Times reported that Chrysler, which has been searching for foreign partnerships, signed with China's Great Wall Motor a memorandum of understanding to explore long-term business ties in areas that include technology, distribution and components.
OTHER PAPERS:
According to the Dallas News, AMR Corporation's (NYSE: AMR) American Airlines informed its flight attendants' union that is may lay off 900 flight attendants on August 31.
WEB SITES:
Yonhap reported that LG Electronics will release "Dare," a new touch-screen mobile phone in the U.S. that will compete with Apple Inc's (NASDAQ: AAPL) latest iPhone models.
How would one describe today other than as a real disappointment? The DJIA broke 12,000 for the first time since March and the pressure here makes one wonder if that magic psychological level will hold. Oil was up over $136/barrel late in the day over strikes in Nigeria and lower inventories.
AMR Corp. (NYSE: AMR) saw another drop of almost 5% by the final minutes, down to $5.42, after the company presented its estimates on fuel use, costs and hedges today at a Merrill Lynch Global Transportation Conference.
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Is Water the New Oil? By 2030 nearly half of the world's population will inhabit areas with severe water stress. In the coming decades, as growing numbers of people live in urban areas and climate change makes some regions much more prone to drought, water -- or what many are calling "blue gold" --will become an increasingly scarce resource. Billionaire T. Boone Pickens thinks water is the new oil -- and he's betting $100 million that he's right. If he's right, T. Boone Pickens is a modern-day John D. Rockefeller. Pickens owns more water than any other individual in the U.S. and is looking to control even more. There Will Be Water - BusinessWeek
US Air (NYSE: LCC) is the latest airline to cut people and routes. It is a wonder it took so long.
The news that another carrier was trying to save itself by chopping expenses was bad enough. Worse was news from the government that airline traffic is falling. According to the AP, "The Transportation Department's Bureau of Transportation Statistics said Thursday that U.S. airlines carried 0.4 percent fewer passengers in March, compared with the year-ago period."
The one hope that U.S. airlines have is that, as expenses rush higher due to increasing oil prices, passengers will continue to fly and pay higher fairs to boot. No such luck.
The news pushed shares in AMR (NYSE: AMR) down over 14% to $4.79. That is against a 52-week high of $29.32. AMR is considered a special risk for Chapter 11 because of the size of its debt-load.
Airlines have continued to expand capacity over the last several years as passenger demand has continued to move up. That trend looks awfully stupid now.
Douglas A. McIntyre is an editor at 247wallst.com.
No, the airlines haven't started charging by the pound. At least not yet...
Jokes aside, nobody told the airlines there'd be days like these, to paraphrase John Lennon.
Jet fuel costs -- up 84% in the past year alone -- have skyrocketed, along with the cost of just about every other product derived from the world's most vital commodity, and the airlines are looking for every conceivable way to reduce weight, reduce wind/resistance drag, and increase operational efficiency, The New York Times reported Wednesday.
The major carriers are replacing heavier seats with lighter ones, cleaning engines and planes more often, reducing the fresh water available on flights, and plugging into electric outlets instead of idling engines at the gate, among other changes, in order to cut fuel consumption.
More air travel changes ahead
Moreover, the changes -- and charges -- have only just begun, so says stock analyst C. Leonard Bauer. "Everyone knows about the added bag charges, a pain in the neck, for sure. But it could get worse," says Bauer, who also flies on a major carrier about 5-7 times per year. "In the winter you could see a per pound baggage charge, or something along those lines. So don't pack that extra winter coat when you fly this December."
Bankruptcy Odds Watch What are the odds that General Motors will have to file for bankruptcy by the end of the year? 30-in-1. What about American Airlines? 2-in-1. Check out 24/7 Wall Street's Bankruptcy Odds Watch on 10 popular companies and what the odds that Northwest, United Airlines, Wachovia, Ford Motor and more will file for bankruptcy. 24/7 Wall St.: The 24/7 Wall St. Bankruptcy Odds Watch
Small Companies, Big Brands Take a look at 10 overachievers that became breakthrough success stories. See how they made their products a household name. They include Ciao Bella, Clif Bar, John Fluevog Boots & Shoes, Pirate's Booty, The Republic of Tea and more. Small Companies, Big Brands - BusinessWeek
Today couldn't have been worse for stocks as we saw the worst drop in equities in months, and the only good news was that this happened on a Friday so traders can have a solid 48 hours to regroup before major world markets reopen for trading after the weekend. Nymex crude oil went above $138.00, up more than $10.00 per barrel today in what was a monster 2-day run in oil. You can thank an Israeli minister for speaking harshly against Iran and signaling that an Israeli attack against Iran is unavoidable. We also saw Morgan Stanley issue a $150.00 oil target today. To make matters even more interesting, we saw unemployment come in at 5.5% and a drop in payrolls by 49,000 (would have been worse except for government hires). Below are the unofficial closing levels for US index levels:
As airlines are the true ultra-proxy for gasoline prices, you can imagine the sector took a beating. AMR Corporation (NYSE: AMR) shares were down almost 10% at $7.04 in the final minutes today.
AMR Corp (NYSE: AMR) shares are trading higher today helped by oil futures prices that are showing signs of losing momentum. It is possible that the speculators are getting out of oil and the price may of crude may be finding a more reasonable level. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on AMR.
After hitting a one-year high of $29.32 in July, the stock hit a one-year low of $6.00 in May. AMR opened this morning at $7.36. So far today the stock has hit a low of $7.26 and a high of $7.90. As of 12:20, AMR is trading at $7.75, up $0.43 (5.9%). The chart for AMR looks neutral but improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a July bull-put credit spread below the $6 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in just seven weeks as long as AMR is above $6 at July expiration. AMR would have to fall by more than 23% before we would start to lose money. Learn more about this type of trade here.
What's holding the airline sector back, in addition to high jet fuel prices, and keeping the likes of 
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.
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