Airline Winners & Losers: Delta

Updated from 12:50 p.m. ET

DALLAS (AP) -- Airline stocks rose Friday as oil fell below $40 a barrel and airline investors shrugged off a pessimistic report from a Goldman Sachs analyst and more bad news about job losses.

The Amex Airlines Index rose 5.3%, with all of its 13 component stocks higher at the end of trading.

Oil prices dipped below $40 Friday, as more bad economic news raised doubts about demand for energy. Light, sweet crude for March delivery fell $1.61 cents to $39.56 a barrel on the New York Mercantile Exchange.

The Labor Department reported that U.S. employers cut more than a half-million jobs in January, the biggest losses in 35 years, and the unemployment rate jumped to 7.6%, the highest since 1992.

The recession is clearly affecting airline travel. Carriers have reported January traffic fell, sometimes by double-digit percentages, compared with January 2008.

Hawaiian Airlines was the latest carrier to report a decline, although helped by the failure of rival Aloha last spring, Hawaiian's traffic slipped just 0.6% from a year earlier.

Goldman Sachs cut its price targets and lowered estimates of 2009 earnings per share for Delta(DAL Quote), Continental(CAL Quote), US Airways(LCC Quote) and JetBlue(JBLU Quote), while raising its earnings forecast for Alaska Air(ALK Quote)

Goldman analyst Christopher Cuomo said revenue will "erode sharply" at many carriers, but he remained neutral on the airline sector as a whole, saying the companies will benefit from lower fuel costs.

In evening trading, shares of Delta Air Lines Inc. jumped 81 cents, or 12.4%, to $7.50; American Airlines parent AMR(AMR Quote) rose 37 cents, or 7.1%, to $5.57; Continental gained 77 cents or 5.8%, at $14.14; and US Airways added 25 cents, or 4.8%, at $5.47.