Sector Snap: Airlines gain despite oil recovery

Analyst Jamie Baker, which had rated UAL "Underweight," lifted his rating on the expectation that shares are "poised for a significant, near-term bounce" as the company prepares to release a capital plan next week. Shares gained 48 cents, or 9.5 percent, to $5.55 in early afternoon trading.

Separately, Baker raised his second-quarter earnings expectations for Alaska Air Group Inc., but widened his loss expectation for US Airways Group Inc.

Both stocks gained though, with Alaska rising $1.04, or 6.7 percent, to $16.55 and US Airways adding 29 cents, or 11.5 percent, to $2.82.

Investors also continued to react positively to Continental's second-quarter results, released Thursday. The Houston-based airline's quarterly loss was narrower than Wall Street anticipated.

Continental shares rose 29 cents, or 2.9 percent, to $10.25.

Pinnacle Airlines Corp. surged after it announced earlier Friday it will continue to fly for Delta Air Lines Inc. through its Delta Connection deal. Pinnacle leaped $1.29, or 35.6 percent, to $4.91. Delta gained 11 cents to $6.92.

Elsewhere in the sector, Northwest Airlines Corp. was the only stock to slip, falling 8 cents to $8.22. Oil prices, meanwhile, fluctuated but traded slightly higher around midday. Light, sweet crude for August delivery gained 59 cents to $129.88--but still remained shy of the $130 mark.