Stocks in a number of airlines rose over 40% last week with some, including AMR (AMR) moving up over 50%. The price of oil sold off sharply enough to warrant some of the improvement in the shares. Earnings for some of the companies were moderately better than expected.

All of that is a bit thin as a defense for such rabid buying.

It only took AMR three days to gain back what its share price had lost over a two-month period. The figures for Delta (DAL), United (UAUA), Continental (CAL), and Northwest (NWA) are not terribly different.

Oil did sell off 11% last week. Many experts think that is temporary.

The demand for oil in the US dropped slightly in the first half, but there is no evidence that the use of crude in nations including China and India is likely to falter. Oil-producing countries continue to keep a larger and larger portion of their yield at home to build out infrastructure and provide fuel for a growing number of cars and trucks.

If the recession continues to deepen, the number of people flying, both for business and pleasure, is likely to drop sharply from present levels.

Airlines may have benefited from good news last week, but oil is still rising along with the odds of a deep recession.

A 50% increase in the stocks is likely to mean a lot of that gain will be given back in the coming months.

Douglas A. McIntyre

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