More Monday merger fun, this time from the airline sector. Reportedly, Southwest Airlines (LUV) announced that it will purchase AirTran Airlines for roughly $1.42 billion.

This move will be funded mainly with debt, and it will help Southwest establish a larger presence in cities like Boston and New York. What's more (as the article points out), Southwest will now be in "head-to-head competition with Delta Air Lines in Delta's home base of Atlanta."

Continental Airlines (CAL - option chain) shares are rising today after the US Justice Department said over the weekend that it has no more antitrust concerns about CAL's proposed merger with UAL Corp. (UAUA). Now the merger only needs to gain approval from UAUA and CAL shareholders as well as the Transportation Department. The deal is expected to close by October 1. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAL.

CAL opened this morning at $22.23. So far today the stock has hit a low of $22.02 and a high of $25.99. As of 12:20, CAL is trading at $22.09 up 0.29 (1.3%). The chart for CAL looks bullish and S&P gives CAL a positive 5 STARS (out of 5) strong buy ranking.

Analyst Upgrades

• Keefe Bruyette upgraded East West Bancorp (EWBC) to outperform from market perform after the company acquired assets from Washington First International Bank. The firm has a $21 price target for shares.
• Piper Jaffray upgraded Amylin (AMLN) to overweight from neutral, citing valuation and Bydureon's profile. The firm maintains a $26 price target for shares.
• Soleil upgraded MGM Mirage (MGM) to hold from sell, citing signs of stabilization in Vegas and valuation. The firm upped its target for shares to $13 from $11.10.
• T. Rowe Price (TROW) was upgraded to outperform from market perform at FBR Capital.
• JetBlue (JBLU) was upgraded to buy from neutral at BofA/Merrill.
• NetEase.com (NTES) was upgraded to buy from hold at Standpoint Research.

Protests and riots in Greece continued as the country's financial situation remained on the edge of the abyss. It seems that even a $144 billion aid package isn't going to be enough to calm the skeptics.

Here were today's closing bell levels:

Dow 10,866.83 -59.94 (-0.55%)
S&P 500 1,165.87 -7.73 (-0.66%)
Nasdaq 2,402.29 -21.96 (-0.91%)

Top Analyst Calls

Blame the Greeks... Why should today be any different? The fear is that the Greek debt crisis is ready to spread. You have heard it before, and you will continue to hear it again. Maybe this is just the excuse the bears needed to take control. Suddenly, the VIX was back above 25 for the first time since February.

Here were today's closing bell levels:

Dow 10,926.77 -225.06 (-2.02%)
S&P 500 1,173.60 -28.66 (-2.38%)
Nasdaq 2,424.25 -74.49 (-2.98%)

Top Analyst Calls

Early this morning, United Airlines (UAUA) and Continental Airlines (CAL) announced that they will join forces to create the world's largest airline in a $3 billion deal.

The new airline will be bigger than Delta Air Lines (DAL) and will send flights as far as Shanghai and South America. The companies believe that the span of destinations should attract more business travelers and their higher fares. The deal, which will need approval from shareholders and antitrust regulators, is expected to close in the fourth quarter. The new company will be known as United Continental Holdings and will be based in Chicago. The airline's largest hub will be located in Houston.

Continental Airlines (CAL - option chain) shares are rising today along with most other airline stocks as crude oil futures are showing bearish indicators for the first time in two weeks. The front-month crude oil contract is down about 1% today and has fallen below its recent trading range. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAL.

CAL opened this morning at $20.42. So far today the stock has hit a low of $20.37 and a high of $21.47. As of 11:45, CAL is trading at $21.21 up $1.00 (5.0%). The chart for CAL looks bullish and S&P gives CAL a its highest 5 STARS (out of 5) strong buy ranking.

Continental Airlines (CAL - option chain) shares are rising today after the company announced this morning that its January traffic rose 8.5 percent from January of 2009 to 6.98 billion revenue passenger miles. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAL.

CAL opened this morning at $19.77. So far today the stock has hit a low of $19.43 and a high of $19.97. As of 11:50, CAL is trading at $19.78 up 49 cents (2.5%). The chart for CAL looks bullish and S&P gives CAL a positive 4 STARS (out of 5) buy ranking.

It goes without saying that investors should tread carefully on the U.S. airline sector, given its uncertainties and hurdles. But one carrier that should survive the scrutiny is Continental Airlines Inc. (CAL). Note: Continental is high-risk stock not suitable for moderate-risk or low-risk investors.

Look for Continental's revenue to increase 6% to 8% in 2010, on higher capacity and improved seat pricing power. Further, CAL should post higher revenue per available seat mile than its competitors in 2010. Also, new fees should add to the top line without resulting in significant passenger attrition.

Continental Airlines (CAL - option chain) shares are rising today after the company said its December traffic rose 6.0 percent compared to December 2008. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAL.

CAL opened this morning at $18.59. So far today the stock has hit a low of $18.42 and a high of $20.45. As of 11:45, CAL is trading at $20.24 up $2.10 (11.6%). The chart for CAL looks bullish and S&P gives CAL a positive 4 STARS (out of 5) buy ranking.

The fact that there hasn't been any action in a while doesn't mean there isn't room for more. Richard Anderson, CEO of Delta Airlines (DAL), says that the airline industry could consolidate further -- not exactly a shock in an industry that is known for universal financial suffering. He notes, "If a transaction were to occur, economics should prevail."

The only concern, of course, is whether the Obama administration would sign off on any future deals. Anderson believes, "I think the case can be made ultimately, but it remains to be seen what this administration's take will be."

American Airlines (NYSE: AMR - option chain) shares are rising today along with most other major airlines this morning after the International Air Transport Association said international passenger demand rose 0.3% year-over-year in September, the first month of growth in the past year. AMR, Delta (NYSE: DAL), Continental (NYSE: CAL) and United (NASDAQ: UAUA) are all in the green between 2% and 3% so far today. If you think that AMR won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on the stock.

AMR opened this morning at $5.68. So far today the stock has hit a low of $5.55 and a high of $5.70. As of 11:50, AMR is trading at $5.57 up 13 cents(2.4%). The chart for AMR looks neutral and S&P gives AMR a neutral 3 STARS (out of 5) hold ranking.

Southwest Airlines Co. (NYSE: LUV), the Dallas-based low-cost air carrier, is scheduled to discuss its third quarter 2009 financial results in a conference call Thursday at 11:30 AM ET hosted by CEO Gary Kelly and CFO Laura Wright. You can catch the live webcast on the company's website.

During the three months that ended in September, Southwest began service to Boston Logan, prepared a bid to acquire Frontier Airlines, and declared its 132nd consecutive quarterly dividend. But analysts surveyed by Thomson Reuters expect the company to report that earnings fell from 9 cents per share a year ago to a penny per share. Sales for the quarter are expected to be 9.7% lower to $2.6 billion.

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

• Amazon.com Inc. (NASDAQ: AMZN) met Q2 earnings estimates but fell short of revenue expectations.
• Coca-Cola Co. (NYSE: KO) lower Q2 results beat expectations, lifted by strength in non-cola beverages.
• Continental Airlines Inc. (NYSE: CAL) reported net loss was accompanied by a job cuts announcement.
• Ford Motor Co. (NYSE: F) surprised with a Q2 profit due mainly to a huge gain from debt reduction.
• Hasbro Inc. (NYSE: HAS) posted better-than-expected Q2 earnings due to Transformers and G.I. Joe toys.
• Hershey Co. (NYSE: HSY) posted strong numbers for Q2 and also raised its full-year guidance.

Private equity is about continuous dealmaking. But, with the wrenching credit crunch, activity has been horrible.

So, what to do? Interestingly enough, it looks like some of the top private equity operators are signing up for board duties.

Look at GM, which this week announced five new members to its board. In fact, three of them are from major private equity firms: The Carlyle Group's Daniel Akerson, S. J. Girsky & Co.'s Stephen Girsky and TPG's David Bonderman.

What's going on here? True, private equity has taken quite a few lumps over the past couple years. For example, Bonderman lost a bundle on his Washington Mutual transaction (which was one of the worst private equity deals in history).