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For years, it's been evident that smaller airlines have had an operating advantage, particularly when they use less expensive airports. They've been able to post better numbers as a result, and in the current travel slump, they've outperformed the larger carriers. Well, they've also picked up a considerable amount of market share.

According to a report by USA Today, low cost carriers now have 30% of the market in the United States. Price-sensitive consumers are turning to cheaper alternatives, even if it means (for fliers with elite status) giving up the perks they've earned through years of customer loyalty.

Here's an update on two shorts: The Washington Post and JetBlue:

Washington Post Company (NYSE: WPO). Short price on May 6, 2009: $344.72. Stopped out for loss at $460. Dead wrong with this one: can't win them all. The Post's education segment has grown revenue enough to offset the declines at the signature print newspaper. A modest U.S. recovery will continue to weigh on the print newspaper side's revenue and earnings, but cost cuts and the development of its online unit mean WPO will be a metro daily survivor after the news/media sector's Internet-compelled transformation.

August brought more misery to the airline industry in the United States. Seven of the country's nine largest carriers saw traffic drop, with only Southwest Airlines (NYSE: LUV) and JetBlue Airways Corp (NASDAQ: JBLU) bucking the trend. The continued upward climb of unemployment, tighter corporate budgets and sluggish demand for leisure travel has resulted in fewer passengers in seats.

JetBue was the only carrier not to report a drop in available seat miles (ASMs), the primary measure of airline productivity. Load factors, however, which indicate how full a plane is, tended to be higher, largely a result of flights that have been cut in an effort to reduce costs.

Analyst upgrades:

• FBR Capital upgraded Frontline (NYSE: FRO) to Market Perform from Underperform to reflect the company's above-average day rates and alleviated near-term financing pressures. The firm raised its target on shares to $23 from $14.
• Baird upgraded Varian Medical (NASDAQ: VARI) to Outperform from Neutral and said checks at ESTRO meeting indicate European radiation therapy market demand will remain "respectable" in 2010 and that launch of Unique could drive incremental demand in developing markets. The firm has a $49 target on shares.
• Goldman believes GameStop (NYSE: GME) Street expectations are beatable and valuation is attractive. The firm upgraded shares to Conviction Buy from Neutral and has a $28 target.
• Borg-Warner (NYSE: BWA) was upgraded to Outperform from Market Perform at Wells Fargo.
• KKR Financial (NYSE: KFN) was upgraded to Outperform from Market Perform at JMP Securities.
• Cathay Pacific (OTC: CPCAY) was upgraded to Outperform from Neutral at Credit Suisse.

The Air Transport Association announced that passenger revenue plunged 21% in July relative to the same month last year. This was the ninth month in a row that the industry has had to contend with what has been a brutal market for a perpetually beleaguered business.

The number of passengers hopping on flights fell 4% from July 2008 to July 2009, and the revenue situation wasn't helped by a decline of 18% in the average price a passenger paid to fly one mile.

There may be new hope for the perpetually ailing airline industry. While I wouldn't expect these companies to become top performers anytime soon, it looks like the best revenue stream is the one nobody's been talking about: change and cancellation fees.

These penalties, which can reach up to $150, bring $2 billion in revenue into the industry annually. According to the Department of Transportation, they were good for $527.6 million in the first quarter -- in the United States alone. This is 3.2% of U.S. airline revenue.

American Airlines parent AMR (NYSE: AMR) raked in $116 million in revenue from these penalties in the first quarter of 2009 -- compared to $108 million from the more highly publicized extra bag fees. For JetBlue (NASDAQ: JBLU), the numbers are smaller (JetBlue, of course, isn't as big as AMR) but no less compelling. By pumping its change and cancellation fee from $100 to $150, the airline scored $32.2 million in Q1 2009, up from $25 million in Q1 2008.

Today was one of those days where stocks looked lower early in the morning, traded lower, and stayed there. Despite recovering from triple-digit losses in the DJIA earlier on, we still closed down 65.63 at 8.675.24 on the DJIA.

The S&P took a bigger hit by almost 13.00 at a lower level of 931.76. Bond prices rallied and we saw a 9 basis point drop in the 10-Year Treasury to 3.55%.

Here were today's top analyst upgrades, and there were several key downgrades as well.

JetBlue Airways Corp. (NASDAQ: JBLU) is looking to sell 20 million shares of common stock and $150 million in convertible debt. Miserable conditions for the airline industry have led the low-cost carrier to turn to financial markets for the infusion that operations can't seem to deliver.

The debt, which is convertible into common stock, will be sold in two $75 million series. And the 20 million common shares would raise another $101 million (at yesterday's closing price of $5.03). If there's enough demand for the debt and equity securities, JetBlue may sell another 3 million shares of common stock and another $11.25 million in debt.

JetBlue isn't alone in raising capital. US Airways Group Inc. (NYSE: LCC) is planning to ask its shareholders to approve a measure that would double the amount of common shares it could issue to 400 million. The answer will come at the company's annual meeting on June 10, 2009.

Analyst upgrades:

• Oppenheimer upgraded FTI Consulting (NYSE:FCN) to Outperform from Perform on expectations the stock will outperform in the second half of 2009 due to easier comparisons and a "deeper and longer" restructuring cycle. The firm has a $62 target on shares.
• Citigroup upgraded Cigna (NYSE:CI) to Hold from Sell to reflect reduced balance sheet risk following the company's capital raise and the potential for a PBM sale. The firm raised its target price to $23 from $13.
• Goldman expects Coca-Cola Enterprises (NYSE:CCE) to benefit from favorable soda demand and lower commodity costs. The firm upgraded shares to Conviction Buy from Buy and has a $20 target on the stock.
• Novellus (NASDAQ:NVLS) was raised to Buy from Neutral at Bank of America/Merrill.
• CME Group (NASDAQ:CME) was upgraded at JP Morgan to Neutral from Underweight.
• Allegiant (NASDAQ:ALGT) was upgraded to Overweight from Equal Weight at Morgan Stanley.
  

Every market is a two-sided market, and while the typical investor makes money during bullish phases, experienced investors know how to make money during bearish phases, as well. In fact, many experienced and institutional traders make more money shorting stocks than by going long.

Short these shares if you can tolerate high-risk and are an experienced investor that does not remove Buy / Stop Losses.

Washington Post Company (NYSE: WPO) The Post's education segment (Kaplan) has grown revenue nicely, but large-single digit (or worse) revenue declines in the flagship print metropolitan daily newspaper The Washington Post will continue to hurt results in F2009, and probably for longer. Buy / Stop Loss if you were to sell shares in this company: $460.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American Express Co. (NYSE: AXP) Q1 profit blew away estimates, sending shares soaring.
• Apple Inc. (NASDAQ: AAPL) topped analysts expectations and offered conservative guidance.
• Boeing Co. (NYSE: BA) reported better-than-expected results but warned that if faced challenges.
• Coach Inc. (NYSE: COH) topped Q3 profit estimates and announced the start of quarterly dividends.
• Continental Airlines Inc. (NYSE: CAL) widened is net loss in Q1 but still beat low Wall Street estimates.

Today was another one of those days that if you did not look up at the closing bell or at the numbers in the last hour of the day where there was no clear feeling of a direction. By 2 O'clock we had switched directions six times today. Weak housing data and more job erosion than expected failed to define any trends. And the US Treasury planning more than $150 billion in auctions next week has failed to make any impression either.

Here are today's unofficial closing bell levels:

Dow 7,957.06 +70.49 (0.89%)
S&P 500 851.92 +8.37 (0.99%)
Nasdaq 1,652.21 +6.09 (0.37%)

Top Analyst Calls

Analyst upgrades:

• JP Morgan upgraded shares of Amazon (NASDAQ:AMZN) to Overweight from Neutral as they believe the company's market share gains in the e-commerce sector will continue and that new product lines are adding diversification of revenue streams.
  
• Wachovia upgraded Leap Wireless (NASDAQ:LEAP) to Outperform from Market Perform citing new market launches that should drive subscriber growth and reduced ARPU deterioration.
  
• Deutsche Bank upgraded shares of Pride International (NYSE:PDE) to Buy from Hold as they believe investors will view the stock as a pure deepwater play beginning in Q2.
• PDL BioPharma (NASDAQ:PDLI) was upgraded to Neutral from Underweight at JP Morgan.
  
• Best Buy (NYSE:BBY) was raised to Buy from Neutral at Goldman.
  
• Altera (NYSE:ALTR) was upgraded at Wachovia to Outperform from Market Perform.

Analyst downgrades:

• Keefe Bruyette downgraded Southside Bancshares (NASDAQ:SBSI), Prosperity Bancshares (NASDAQ:PRSP), Cullen/Frost (NYSE:CFR) and BancFirst (NASDAQ:BANF) to Underperform from Market Perform on valuation and the weakening economic outlook in the Southwest.
  
• Oppenheimer cut Varian Medial (NYSE:VAR) to Perform from Outperform as they believe U.S. hospitals could reduce capital spending budgets by 15%-25% in 2009.
  
• Dress Barn (NASDAQ:DBRN) was lowered to Neutral from Buy at SunTrust based on valuation and lack of near-term catalysts.
• JetBlue (NASDAQ:JBLU) was downgraded at Jesup & Lamont to Hold from Buy.
  
• Credit Suisse cut Novellus (NASDAQ:NVLS) to Underperform from Neutral.
  
• Helen of Troy (NASDAQ:HELE) was downgraded to Underweight from Neutral at JP Morgan.

Analyst initiations:

• Merriman initiated Capstone Turbine (NASDAQ:CPST) with a Neutral rating and finds the stock fairly valued at current levels.
  
• Leerink sees a high likelihood that Momenta's (NASDAQ:MNTA) lead product candidates M-Enoxaparin and M-356 clear regulatory and legal hurdles. The firm has an Outperform rating and $16 fair value estimate on shares.
  
• NCI (NASDAQ:NCIT) was initiated with a Market Perform rating at Wachovia based on valuation.
• Teradyne (NYSE:TER) was assumed at Barclays with an Overweight rating and $6 target.

U.S. stock futures once again were lower this morning, albeit more moderately, pointing to another lower start and possibly another down day following Wednesday's declines. Investors concern over the economy remained unabated, especially in light of recent and future corporate profits. This morning, weekly initial jobless claims will be released an hour ahead of the opening bell, and the numbers are expected to show yet another increase. Meanwhile, investors will continue to eye oil prices, which rebounded from a 16-month low to above $67, and foreclosures, which grew by 71% in the third quarter compared with the same period in 2007.

Sony Corp. (NYSE: SNE) drastically lowered profit and sales forecasts for the fiscal year Thursday, blaming weaker electronics sales and the stronger yen.

Goldman Sachs Group Inc (NYSE: GS) is joining many other companies recently announcing layoffs as it also plans to cut about 3,260 jobs, representing about 10% of its total staff.

Amazon.com Inc. (NASDAQ: AMZN) reported a 48% climb in profit in the third quarter on strong sales of electronics, beating analyst estimates. But the company reduced its full-year profit outlook. AMZN shares traded down 14% in after-hours action.

Analyst upgrades:

• Merrill upgraded shares of General Motors (NYSE: GM) and Ford (NYSE: F) to Neutral from Underperform on expectations for fundamentals to improve in 2009.
  
• Citigroup upgraded Chubb (NYSE: CB) and Travelers Group (NYSE: TRV) to Buy from Hold as they expect the company to benefit from the AIG (NYSE: AIG) fallout. The firm raised Chubb's target to $57 from $56 and Travelers Group's target to $51.50 from $49.50.
  
• Credit Suisse upgraded shares of SAP AG (NYSE: SAP) to Outperform from Neutral as they believe margin expansion can drive higher profitability.
• JetBlue (NASDAQ: JBLU) was upgraded to Buy from Hold at Argus.
• Goldman raised Merrill Lynch (NYSE: MER) to Neutral from Sell.
  
• NetLogic (NASDAQ: NETL) was upgraded to Buy from Neutral at Piper.

Analyst downgrades:

• JP Morgan downgraded Eli Lilly (NYSE: LLY) to Underweight from Neutral citing the company's early stage pipeline and generic competition.
  
• Merrill downgraded Unilever (NYSE: UL) to Neutral from Buy as they believe the incoming CEO is unlikely to bring a major restructuring or split up the company.