SAN FRANCISCO (AFX) -- An upbeat analysis of airlines' prospects from Bear Stearns fueled select gains in the sector Monday, with Continental Airlines and AMR Corp. among the biggest gainers.
The Amex Airline Index added 0.4% to 55.54 points at the close. Six of the 10 index components traded higher.
The Monday advance builds on last week's gains.
While Bear Stearns analysts lowered their estimates for Frontier Airlines along with AirTran Holdings and AMR Corp. , the broad tone of the note was bullish.
AMR, the parent of American Airlines, advanced 2.4% to $27.53.
On the downside, Frontier's shares fell 3.6% to $7.60 as a standout decliner.
AirTran and Southwest Airlines both lost about 1%.
Overall, Bear Stearns said it expects improvements in early 2006 for several airlines, despite a rise in fuel prices, calling for strength in the key measurement of revenue per available seat mile.
The brokerage's analysts raised earnings estimates for Alaska Air Group , Continental , US Airways Group .
'Underpinning our positive tone on the airline sector is the supportive unit revenue environment,' driven by capacity cutbacks, and continued economic expansion and traffic growth, according to Bear Stearns.
JetBlue closed up 0.5% to $10.59, while U.S. Airways added 1.2% to $39.17 and Alaska Air gained 2% to $35.01. Continental's shares also closed with gains, moving back toward the 52-week high set last week. This story was supplied by MarketWatch. For further information see www.marketwatch.com.