Airlines Take Off on Goldman Note

Airline stocks, which have been among the best performers since markets bounced off their March lows, were rallying again on Monday, thanks to a bullish note from Goldman Sachs.

In a sign of how far sentiment has come in two months, Goldman Sachs upgraded AMR (AMR Quote), parent of American Airlines, to outperform from in line, telling investors that the risk of bankruptcy has passed and that the industry is on the verge of recovery. Besides issuing the upgrade, analyst Glenn Engel also raised his earnings estimates on a number of airlines.

"As liquidity fears fade, we believe airline stocks will continue to significantly outperform the market, especially if business travel turns up as our leading indicators are starting to suggest," Engel said in a research note. ...