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.

Continental Airlines (NYSE: CAL) just got the relief it needs to compete. Despite resistance from the Department of Justice (which can only recommend), the Department of Transportation has granted the airline immunity from antitrust laws. This clears the way for Continental to work with United Airlines (NASDAQ: UAUA) -- and other carriers -- on international routes. Now, the airline can join Star Alliance, which already has antitrust immunity.

At the same time, DOT approved a joint venture among Continental, United, Lufthansa (OTC: DLAKY) and Air Canada. This new relationship would involve trans-Atlantic routes.

Analyst upgrades:

• Citigroup upgraded Adtran (NASDAQ: ADTN) to Buy from Hold on expectations the company will benefit from the broadband Stimulus funds.
• Morgan Stanley upgraded Continental Airlines (NYSE: CAL) to Overweight from Equal Weight based on relative valuation and views the company as a "survivor." Additionally, the analyst lowered 2009 industry estimates but believes it is the last cut for the year and is incrementally more positive on the sector.
• Morgan Stanley also upgraded EXFO Electro-Optical (NASDAQ: EXFO) to Overweight from Market Weight based on valuation.
• Tata Motors (NYSE: TTM) was upgraded to Buy from Hold at Deutsche Bank.
• Ascent Solar (NASDAQ: ASTI) was upgraded to Neutral from Underweight at JP Morgan.
• Mechel Steel (NYSE: MTL) was upgraded to Neutral from Underperform at Credit Suisse.

Today was almost as fitting as you could get for a Friday ahead of a 3-day weekend. It felt quiet and directionless, despite a huge late-day recovery just the day before. It was as if the markets had no serious direction ahead of a long weekend even though the stimulus package essentially looks like a done deal and even with banks halting all foreclosure activities for a brief period of time.

Here are today's unofficial closing bell levels:

Dow 7,849.13 -83.63 (-1.05%)
S&P 500 826.70 -8.49 (-1.02%)
Nasdaq 1,534.36 -7.35 (-0.48%)

10YR T-NOTE 2.88% (+0.12%)
Top Analyst Upgrades

At about 10:20 EST, Continental Flight 3407 (also reported as 1304), a commuter plane out of Newark, crashed into a home in Buffalo, New York. According to reports, all 48 people aboard -- 44 passengers and four crew members -- and one person on the ground were killed.

The scene is currently engulfed in flames. The plane had been quite late departing Newark was arriving two hours past its scheduled time when it crashed about 10 miles from Buffalo Niagara International Airport. The Q400 Bombardier aircraft was flying in fog, snow and wind.

After last month's crash landing of a US Airways flight, airline stocks have taken quite a hit, all down as much as 50% since their highs in early January. Good news for the crew of flight 1549 did not translate into good news for US Airways (NYSE: LCC), and certainly not for Continental Airlines Inc. (NYSE: CAL). Though the airline's stock will likely see big volatility at the start of trading on Friday, I don't expect this news to majorly impact the fortunes of either Continental or US Airways over the next 30 days.

What's holding the airline sector back, in addition to high jet fuel prices, and keeping the likes of AMR's (NYSE: AMR) American, Delta (NYSE: DAL), UAL's (NYSE: UAUA) United, Southwest (NYSE: LUV), and Continental Airlines (NYSE: CAL) from realizing their potential?

Many economists and analysts would agree that, along with other infrastructure and related investments, the nation's air traffic control system must be upgraded, if the United States seeks an air transportation system capable of maintaining a high level of safety -- and better service -- in the 21st century's more-crowded skies.

Further, that the United States has not already replaced an essentially generation-old air traffic control technology with a modern system is a serious demerit, and one that has -- through delays, cancellations, and other problems -- taken a toll on the flying public and the major carriers.

This post is part of a series on some of the most memorable companies that have disappeared.

With soaring fuel prices and declines in discretionary spending leading to bankruptcies and mergers among the airlines these days, one might forget that such things have often occurred in that industry since its early days. Take Eastern Air Lines, one of the first and longest-running of the so-called trunk carriers in the United States.

Eastern began as a mail carrier for the U.S. Postal Service in the mid-1920s but through acquisition and expansion came to dominate much of the domestic travel industry along the profitable East Coast corridor by the 1950s. Back then the company was widely known for its famous president, former World War I Ace, Eddie Rickenbacker.

The airline thrived into the 1970s, when it was one of the "big four" major U.S. airlines. In its time, Eastern pioneered the use of a worldwide computer reservation system and the all-jet mainline fleet. However, the carrier struggled after the Air Transportation Deregulation Act of 1978. Former astronaut turned CEO Frank Borman finally relented to corporate raider and union buster Frank Lorenzo's buyout offer in 1985. Valuable assets such as new aircraft, the East Coast shuttle service, lucrative fuel operations, and the worldwide travel agent computer system were sold off or shifted to Lorenzo's other carrier, Continental Airlines (NYSE: CAL). Deteriorating labor relations forced Eastern into bankruptcy in 1989, at the time the largest airline bankruptcy in U.S. history. The carrier ceased operations the day after the start of Operation Desert Storm in 1991.

MOST NOTEWORTHY: Airlines, Chelsea Therapeutics and Clearwire were today's noteworthy downgrades:

• Merrill downgraded AMR Corp (NYSE:AMR), Delta Air Lines (NYSE:DAL), Continental Airlines (NYSE:CAL), US Airways (NYSE:LCC) and UAL Corp (NASDAQ:UAUA) to Neutral from Buy citing earnings risk this year from higher energy costs.
  
• Oppenheimer downgraded shares of Chelsea Therapeutics (NASDAQ:CHTP) to Perform from Outperform after their survey suggested physicians believe currently available generic treatments are adequate in neurogenic orthostatic hypotension, which could impact the company's lead drug Droxidopa.
  
• Clearwire (NASDAQ:CLWR) was cut to Sell from Hold at Citigroup on valuation, as they estimate fair value at $13.

OTHER DOWNGRADES:

• Goldman downgraded Kellogg (NYSE:K) to Neutral from Buy and Hershey Foods (NYSE:HSY) to Sell from Neutral.
  
• Piper lowered Orbitz Worldwide (NYSE:OWW) to Neutral from Buy.

MOST NOTEWORTHY: The airline sector, Siemens and Internap were today's noteworthy downgrades:

• Lehman downgraded the airline sector to Neutral from Positive, citing higher fuel costs and the weakening economy. AirTran (NYSE: AAI) and U.S. Airways (NYSE: LCC) were downgraded to Equal Weight from Overweight. UBS said it can no longer recommend airline stocks due to weakening economy, high fuel prices, and less likely industry consolidation. The firm downgraded Continental Airlines (NYSE: CAL), Delta Air Lines (NYSE: DAL), Northwest Airlines (NYSE: NWA) and U.S. Airways to Neutral from Buy.
  
• Goldman removed shares of Siemens (NYSE: SI) from their Conviction Buy List as they believe the company may book additional charges of $1.2B this year.
  
• Jefferies cut Internap (NASDAQ: INAP) to Underperform from Buy as they believe the 10-K filing delay and revenue quality questions reduce visibility into the health of the business.

OTHER DOWNGRADES:

• Wachovia lowered Amgen (NASDAQ: AMGN) to Market Perform from Outperform.
  
• SI International (NASDAQ: SINT) was downgraded to Neutral from Outperform at Cowen.
  
• Citigroup cut Assured Guaranty (NYSE: AGO) to Hold from Buy.

In the airline industry, it seems that any deal will do. Northwest Airlines Corp. (NYSE: NWA) is already fairly far along in discussions about merging with Delta Air Lines Inc. (NYSE: DAL). Now UAL Corp.'s (NASDAQ: UAUA) United Airlines is talking with Continental Airlines Inc. (NYSE: CAL). But one set of negotiations in not enough for Continental. It is also talking to AMR Corp.'s (NYSE: AMR) American Airlines, according to The Wall Street Journal (subscription required). The paper reports "the talks were exploratory, and it isn't clear they will go further."

Airlines are seeking mergers under the premise that combining companies saves costs. While that is true to some extent, the marriages also hurt customer service -- badly. Putting together incompatible reservations and service operations can take years and be extremely complex, which can make it hell for consumers who just want to take an airplane ride from here to there. Bad customer service is a sure way to drive off fliers, and that is not good for revenue.

The savings in a merger also might not be as great as imagined. Fuel costs stay the same. The number of pilots and crews may drop some, but that can also cause labor disputes and strikes that interrupt service. The number of people needed to handle customer support and processing of reservations probably cannot be cut by much, especially if retaining revenue with unhappy fliers is important.

In an industry where mergers and Chapter 11 filings have been part of the landscape for decades, combining airlines may be no panacea. It is good to remember that the two most successful carriers in the United States, American and Southwest Airlines Corp. (NYSE: LUV) have never been much enamored of merging.

Douglas A. McIntyre is an editor at 247wallst.com.

MOST NOTEWORTHY: Patterson-UTI Energy, Nabors Industries, US Steel Group, Cooper Companies and Continental AG were today's noteworthy upgrades:

• Bernstein upgraded Patterson-UTI Energy Inc (NASDAQ: PTEN) and Nabors Industries Limited (NYSE: NBR) to Outperform from Market Perform citing valuations and secular growth trends.
• Citigroup upgraded US Steel Corporation (NYSE: X) to Buy from Hold and raised their target to $118 to reflect operating catalysts and their expectations for domestic steel markets to improve in Q4 and 2008.
• Cooper Companies Inc (NYSE: COO) was also upgraded to Buy from Hold at Citigroup despite the lowered guidance as they believe the company's products are improving and earnings upside is possible.
• WestLB upgraded Continental AG (OTC: CTTAY) to Buy from Hold after the tire marker announced plans to reorganize its company structure into six divisions following the purchase of Siemens AG's (NYSE: SI) VDO automotive unit.

OTHER UPGRADES:

• Tempur Pedic International (NYSE: TPX) was upped to Sector Outperformer from Sector Performer at CIBC World Markets.
• Friedman Billings upgraded shares of Stone Energy Corporation (NYSE: SGY) to Outperform from Market Perform.
• Deutsche Bank upgraded shares of Occidental Petroleum Corporation (NYSE: OXY) to Buy from Hold.
• Fifth Third Bancorp (NASDAQ: FITB) was raised to Market Perform from Underperform at Bernstein.

MOST NOTEWORTHY: Commercial Metals (CMC), KKR Financial (KFN), Career Education (CECO), Ann Taylor (ANN) and Intel (INTC) were today's noteworthy upgrades:

• CIBC upgraded Commercial Metals (NYSE: CMC) to Sector Outperformer from Sector Performer based on valuation.

• KKR Financial (NYSE: KFN) was raised to Outperform from Market Perform at Friedman Billings, following managements detailed conference call and managements prudent and rapid actions to address the sale of its Rambus (RMBS) portfolio.

• Bear Stearns upgraded Career Education (NASDAQ: CECO) to Outperform from Peer Perform based on valuation.

• Ann Taylor (NYSE: ANN) was upgraded to Outperform from Market Perform at Piper Jaffray due to the upside at the company's LOFT division and the firm's belief that there is upside to their 2008/2009 estimates for Ann Taylor.

• Credit Suisse upgraded shares of Intel (NASDAQ: INTC) to Outperform from Underperform based on expected margin expansion, a more benign competitive environment in the MPU sector, better positioning vs. AMD (AMD) at the high-end, and strong demand trends...

OTHER UPGRADES:

• Citigroup upgraded Sovereign Bancorp (NYSE: SOV) to Buy from Hold.

• Network Appliances (NASDAQ: NTAP) was upgraded to Buy from Neutral at Merrill Lynch and Caris raised shares to Buy from Above Average.

• JP Morgan added Continental (NYSE: CAL) to its Focus List. Punk upgraded Washington Mutual (WM) to Buy from Market Perform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

In another lap tray to the belly, customers of Milwaukee-based Midwest Air Group (NYSE: MEH), repeatedly named as one of the nation's best airlines for customer service and comfort, learned today that the airline will be purchased by a group led by TPG Capital. The investor group includes Midwest's competitor Northwest Airlines (NYSE: NWA), which is reviled by passengers for its cattle-car seating, lack of timeliness and failure to understand the concept of customer service

The acquisition offers little in the way of synergy to the two airlines. They duplicate many routes, and Midwest flies the Boing 717, while Northwest uses 747s and 757s. What the deal does accomplish is to block the expansion of a potential competitor in Northwest's upper midwest routes. While the deal secures the present management of Midwest, I suspect it's just a matter of time before the malaise reaches Milwaukee.

Midwest has been fighting off suitor Airtran Holdings' (NYSE: AAI) hostile takeover attempt, which reached $15.75 and $389 million before it folded its cards late last week. TPG, which grew out of the Continental Airlines (NYSE: CAL) takeover in 1993, is offering $16 per share, or over $400 million, to take the company private. The Midwest board voted Sunday to go forward with the TPG offer, and an agreement is expected by midweek.

As of today, there's a new airline in the skies: Virgin America. That's right folks: British Billionaire Richard Branson has expanded his Virgin Atlantic fleet across the pond. The new San Francisco-based start-up will use a fleet of Airbus A320's to fly two routes: San Francisco to J.F.K in New York and San Francisco to Los Angeles International.

While Virgin America will only open with those two routes, they plan on ramping its schedule fast. In the next three months, Virgin will add Las Vegas and Washington Dulles to the schedule and move up to a total 10 U.S. destinations a year from now. The fleet plans to service 30 destinations within the next five years.

MOST NOTEWORTHY: Siemens AG (SI), Business Objects (BOBJ), Continental Airlines (CAL), Lawson Software (LWSN) and Trump Entertainment Resorts, Inc (TRMP) were today's noteworthy upgrades:

• Lehman upgraded shares of Siemens AG (NYSE: SI) to Overweight from Neutral reflect the potential major portfolio reorganization over the next few years as well as the strong momentum in the group.

• UBS upgraded shares of Business Objects (NASDAQ: BOBJ) to Buy from Neutral to reflect easy compares in Q2 and signs of improving underlying European demand.

• Soleil upgraded Continental (NYSE: CAL) to Buy from Hold as they believe better-than-expected June consolidated revenue growth suggests strong enough revenue momentum to offset above-average domestic capacity growth affecting its important Newark hub.

• Matrix upgraded Lawson Software (NASDAQ: LWSN) to Sell from Strong Sell to reflect increasing revenues from software licenses.

• Brean Murray upgraded shares of Trump Entertainment (NASDAQ: TRMP) to Buy from Hold citing recent share weakness, improving trends, potential monetization of excess real estate and the use of the Trump brand outside of Atlantic City...

OTHER DOWNGRADES:

• Northstar Realty Finance Corp (NYSE: NRF) was upgraded to Outperform from Market Perform at Wachovia.

• Goldman raised Par Pharmaceuticals' (NYSE: PRX) rating to Neutral from Sell.

• Bernstein upgraded Avon Products (NYSE: AVP) to Market Perform from Underperform.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).