Oh, and someone some day will probably buy AMR or parts of it out of bankruptcy for a song. Perhaps it is simply just another 100-point-plus drop in the DJIA or another double-digit drop in the S&P 500 Index.  The major airline carriers are trading today:

United Continental Holdings, Inc. (NYSE: UAL) is down 1% at $21.61 against a 52-week range of $15.51 to $26.50; UAL was above $24.00 just one week ago.

Delta Air Lines Inc. (NYSE: DAL) is down 0.8% at $10.45 with a 52-week range of $6.41 to $11.58; Delta is down almost 10% in less than two weeks.

US Airways Group, Inc. (NYSE: LCC) is down only 0.4% at $10.58 against a 52-week range of $3.96 to $11.73; US Air is down about 10% in less than two weeks.

Southwest Airlines Co. (NYSE: LUV) is performing the worst of the lot because most investors believe that are actively hedging and that means they won’t benefit as much from lower oil prices.  Southwest’s share price is down 1.2% at $8.18 against a 52-week range of $7.15 to $12.04.

JetBlue Airways Corporation (NASDAQ: JBLU) is an exception to the rule today.  Its shares are up 3% at $4.40 against a 52-week range of $3.40 to $6.32 in part on follow-on buying after a director of the company bought more than $200,000 worth of stock.

The question that has to be asked is how the end of summer demand is going to be and how the end of 2013 will hold up.  Right now investors are using anything as a source of funds but the movement here might be acting differently than it should be.

JON C. OGG

The potential deal follows the acquisition of a Pennsylvania refinery by Delta Air Lines Inc. (NYSE: DAL). Two European oil trading houses, Gunvor and Vitol, have each acquired a European refinery recently from bankrupt Swiss firm Petroplus. Another large Caribbean refinery, Hovensa in the US Virgin Islands, is a joint venture between Hess Corp. (NYSE: HES) and Venezuela’s state-owned oil company PdVSA and will be shut down soon as well.

According to Reuters, the Aruba refinery would partially refine the heavy, sour crudes from Venezuela and ship the product to China where refining into usable products would be completed.

PetroChina is not likely to have any problem with acquiring the plant because it is not on US territory, but a possible acquisition of the Hovensa plant could trigger a review by federal Committee on Foreign Investment in the United States (CFIUS). The committee has in the past approved the sale of some energy assets in the US, for example by Chesapeake Energy Corp. (NYSE: CHK).

The possible sale by Valero has not boosted its share price today, which is currently down about -0.5% at $22.46 in a 52-week range of $16.40-$28.68.

Paul Ausick

Icahn will replace seven of the nine-member CVR board, eliminate CVR’s recently adopted poison pill, and actually get his hands on the shares. Icahn will also receive the general partner interest that CVR holds in CVR Partners L.P. (NYSE: UAN) as well as CVR’s majority ownership of CVR Partners’ common units. CVR owns two refineries with a combined capacity of 180,000 barrels/day. CVR Partners owns and operates the company’s nitrogen fertilizer plant.

CRV owns two refineries, one in Kansas and the other in Oklahoma, and whether or not the two plants will command the prices Icahn is counting on is arguable. Delta Air Lines Inc. (NYSE: DAL) just paid $150,000 for a 185,000 barrel/day refinery, but the purchase price did not include the value of the crude oil stocks. Icahn’s purchase does include crude stocks.

The two acquired companies own crude oil storage facilities totalling 3 million barrels and a lease on 3.3 million barrels of storage capacity at Cushing, Oklahoma. It’s not clear how much crude is in these tanks, but 3 million barrels at $100/barrel is worth $300 million and there could more in the tanks.

The company’s nitrogen fertilizer business is considerably smaller than the petroleum operation, but had planned to expand capacity by 50% in the next two years. That growth plan is likely to be someone else’s problem now.

Shares of CVR Energy are up about 1.4% at $30.46 in a 52-week range of $16.62-$30.51, and common units of CVR Partners are down about -3% at $26.95 in a 52-week range of $17.76-$31.00.

Shares of Icahn Enterprises are down about -2% at $43.46 in a 52-week range of $35.01-$49.89.

Paul Ausick

Here is how some of the major airline carriers are trading today: United Continental Holdings, Inc. (NYSE: UAL) is up 3% at $22.22; Delta Air Lines Inc. (NYSE: DAL) is up 1.1% at $11.08; US Airways Group, Inc. (NYSE: LCC) is up 1.2% at $10.84.

The one exception is Southwest Airlines Co. (NYSE: LUV) with its shares trading down 1.3% at $8.11 because it is a hedge-play.  Southwest is an airline which often is more active in hedging out its oil price exposure, so a drop of more than 5% in oil prices from the peak in oil this week does not necessarily translate t quite as high of savings for Southwest.

What is important to remember here is that a $1.00 drop in crude is supposed to be worth about $400 million in profits to the airline industry.

JON C. OGG

The unofficial closing bells put the DJIA up nearly 67 points to 13,280.31 (0.5%), the NASDAQ rose about 4 points (0.13%) to 3,050.44, and the S&P 500 rose 0.57% or nearly 8 points to 1,405.89.

There were several analyst upgrades and downgrades today, including Watson Pharmaceuticals Inc. (NYSE: WPI) reiterated as ‘buy’ at Canaccord Genuity; AstraZeneca PLC (NYSE: AZN) raised to ‘neutral’ at BofA; Abercrombie & Fitch Co. (NYSE: ANF) raised to ‘buy’ at UBS; SunPower Corp. (NASDAQ: SPWR) raised to ‘buy’ at Citigroup; Yingli Green Energy Holdings Co. Ltd. (NYSE: YGE) raised to ‘buy’ at Citigroup; Costco Wholesale Corp. (NASDAQ: COST) cut to ‘hold’ at Deutsche Bank; and Meru Networks Inc. (NASDAQ: MERU) cut to ‘neutral’ at RW Baird.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Arch Coal Inc. (NYSE: ACI) is down -3.8% at $9.39 (more coverage here); Veeco Instruments Inc. (NASDAQ: VECO) is up 14.8% at $34.67 (more coverage here); Pep Boys – Manny, Moe & Jack (NYSE: PBY) is down -21.8% at $11.67 (more coverage here); Archer Daniels Midland Co. (NYSE: ADM) is up 7.9% at $33.25; Corn Products International Inc. (NYSE: CPO) is down -0.14% at $56.98; Avon Products Inc. (NYSE: AVP) is down -7.6% at $19.95; Domino’s Pizza Inc. (NYSE: DPZ) is down -9.6% at $34.18; Pfizer Inc. (NYSE: PFE) is down -0.14% at $22.87; and Valero Energy Corp. (NYSE: VLO) is up 0.9% at $24.92.

Tomorrow we get earnings from Barrick Gold Corp. (NYSE: ABX), JDS Uniphase Corp. (NASDAQ: JDSU), Marathon Oil Corp. (NYSE: MRO), First Solar Inc. (NASDAQ: FSLR), and Visa Inc. (NYSE: V).

Other standouts from today include the following stocks:

P.F. Chang’s China Bistro Inc. (NASDAQ: PFCB) is up 29.7% at $51.46. The company is being taken private in a deal worth $1.1 billion. More coverage here.

Delta Air Lines Inc. (NYSE: DAL) is up 0.8% at $11.05. The airlines bought an oil refinery from newly-public Phillips 66 (NYSE: PSX). More coverage here.

Chesapeake Energy Corp. (NYSE: CHK) is up 6.3% at $19.60. The company’s chairman will be replaced and the company reports earnings after markets close today. More coverage here.

Stay tuned for Wednesday. Fed Governor Daniel Tarullo and Richmond Fed President Jeffrey Lacker are giving speeches. We have noted the following events on the schedule (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association purchase applications
• 7:30 a.m. – Challenger job cut report
• 8:15 a.m. – ADP employment report
• 10:00 a.m. – Factory orders
• 10:30 a.m. – EIA weekly petroleum status report

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Paul Ausick

Delta will pay $150 million for the refinery and expects to spend another $100 million to boost the plant’s capacity to make jet fuel, which is the reason Delta bought the refinery in the first place. The deal follows yesterday’s $5.3 billion acquisition by Energy Transfer Partners L.P. (NYSE: ETP) of downstream company Sunoco Inc. (NYSE: SUN).

A couple of interesting questions follow Delta’s entry into the refining business. First, will other airlines follow? United Continental Holdings Inc. (NYSE: UAL), US Airways Group Inc. (NYSE: LCC), and Southwest Airlines Co. (NYSE: LUV), like other large carriers, follow a hedging strategy that tries to even out the ups-and-downs of crude prices. When it works, as it did for Southwest in 2006 and 2007, management looks like geniuses and the airlines makes a ton of profit. When it doesn’t work, as it didn’t for Southwest a few years later, the less said the better.

The only reason to buy a refinery is to mitigate price risk on crude oil. Delta claims the cost of the refinery is equivalent to the price it would pay for one widebody jet. The company expects to save twice that much annually on fuel costs going forward. Before United and the other carriers jump into the refining business they will want to see if Delta can actually realize its projected savings.

Which brings us to the second question: how does Delta expect to mitigate crude oil price risk? When the possible refinery acquisition first became known, there were reports that JPMorgan Chase & Co. (NYSE: JPM) would take on the crude oil trading that would be needed to supply the refinery. As announced today:

[Delta subsidiary] Monroe is partnering with leading energy companies to supply crude oil and receive jet fuel in exchange for Trainer’s non-jet fuel outputs. Under a three-year agreement, BP will supply the crude oil to be refined at the facility. Monroe Energy will exchange gasoline and other refined products from Trainer for jet fuel from Phillips 66 and BP elsewhere in the country through multi-year agreements.

The “leading energy companies” are ConocoPhillips and BP plc (NYSE: BP). If BP is supplying the crude, the price will be set at or very near Brent crude prices. Jet fuel is generally more expensive than gasoline and other refined products. As Brent prices rise, jet fuel prices will also rise and probably rise faster than gasoline or diesel prices. Thus, Monroe/Delta will be trading lower-priced products for a higher-priced product. No savings there.

The only way for Delta to make sure it saves money is to source its crude more cheaply. In the US, that means getting crude from North Dakota’s Bakken field to the East Coast. There’s no pipeline (yet) to do that. Surely the lack of cheap crude is why JPMorgan is no longer in the picture. The proposed sale of Sunoco’s 335,000-barrel/day Philadelphia refinery to The Carlyle Group will not be concluded if the private equity firm cannot find a source of cheaper crude.

Delta apparently believes that by sourcing crude from BP the airlines has insulated itself from crude price risk. Not having seen details of the contract it’s hard to say. But oil companies are not charitable organizations and BP won’t have made any big concession on price.

Shares of Delta are up about 2.2% in the pre-market at $11.20 in a 52-week range of $6.21-$11.60. A new annual high is certainly within reach today.

Paul Ausick

BP (NYSE: BP) profits fall as it sells some assets to pay for the Gulf spill. (Reuters)

New York state pension funds vote against five Walmart (NYSE: WMT) directors. (Reuters)

Microsoft (NASDAQ: MSFT) takes a position in the Barnes & Noble (NYSE: BKS) e-reader operation. (Reuters)

Two top Federal Reserve officials say there will be no more easing by the central bank. (Reuters)

A shareholder sues Google (NASDAQ: GOOG) to stop a stock split that would favor management control. (Reuters)

Bank of America (NYSE: BAC) will cut a large number of investment and commercial bankers. (WSJ)

Sales of cars in Japan jumps in April. (WSJ)

Economies of scale, still enjoyed because of Nokia’s (NYSE: NOK) size, may help turn around the company. (WSJ)

Home ownership falls to a 15-year low. (WSJ)

A large number of management departures hurts the ability of Freddie Mac and Fannie Mae to recover. (WSJ)

St. Jude Medical (NYSE: STJ) continues to wrestle with problems with one of its heart devices. (WSJ)

Coca-Cola (NYSE: KO) may buy Monster Beverage (NASDAQ: MNST), an energy drink company. (WSJ)

General Electric (NYSE: GE) sales in Australia rivals its Chinese revenue. (WSJ)

Caterpillar (NYSE: CAT) may face a large strike. (WSJ)

Delta Air (NYSE: DAL) finally decides to buy a northwest refiner. (WSJ)

Banks sharply increase loans to companies with junk-bond ratings. (WSJ)

The S&P 500 posts its first monthly loss since November. (NYT)

Germany continues to insist that austerity is the best means to improve the finances of troubled EU nations. (FT)

Groupon (NASDAQ: GRPN) will add two financial experts to its board. (FT)

Douglas A. McIntyre

Read The American Companies With the Most Customers

The customer bases of many of these companies are in the tens of millions. Each company operates in an industry that provides a product or a service to an extremely wide spectrum of American consumers. The leader in each sector reached its position through innovation, longevity or some combination of the two.

Each of the industries on this list serves a very large base of customers. For example, there are thousands of retailers, serving pretty much the entire population, but only Costco is the leader in membership with over 65 million members. Founded in 1983, Costco (NASDAQ: COST) is a relatively new company. It became a success largely because it charges customers a membership fee for access to its stores and in exchange offers extremely low prices that are never marked up more than 15% above the price Costco pays.

Some industries are huge, but only have a small number of competitors. While there are only a handful of national wireless carriers, there are over 330 million wireless subscriptions in the U.S. — more than the population itself. But there are only four competitors of any size — AT&T (NYSE: T), Verizon Wireless, Sprint-Nextel (NYSE: S) and T-Mobile. Each company has to battle for a share of a market that is no longer growing. The weapons the companies use to gain market share are products, customer service and price. AT&T is the leader. Its share of the market is based to some extent on history. It is a descendant from the original AT&T phone monopoly. But without strong products and intelligent pricing there is no assurance it can stay ahead of number two competitor Verizon Wireless.

24/7 Wall St. examined 10 of America’s largest consumer industries and the customer counts for the biggest two or three companies in each sector. We then reviewed the history of each industry in an attempt to find how the top company in each reached its leadership position. To rank the companies, 24/7 Wall St. took each leader and compared it in size to the leaders in the other industries chosen. We used company and industry data to confirm customer counts. Each company in this ranking is the largest company in its industry, based on customer count.

These are the American Companies with the Most Customers.

At US Airways, profits rose to $48 million, which included a one-time gain of $73 million on a transaction with Delta related to takeoff and landing rights at LaGuardia and Reagan National. Stripping out the one-time items, US Airways posted an EPS loss of -$0.13, far better than the EPS loss of -$0.68 in the same period a year ago and nearly two times better than the consensus analyst estimate for an EPS loss of -$0.25. Revenue of $3.27 billion was also better than the consensus estimate of $3.24 billion.

The two airlines follow Southwest Airlines Co. (NYSE: LUV) and AMR Corp.’s (OTC: AAMRQ.PK) American Airlines, both of which reported earnings last week. Southwest also posted a profit on hedging gains, and American’s loss, stripping out one-time charges, was 40% smaller than it was in the same period a year ago.

United Continental Holdings Inc. (NYSE: UAL) is scheduled to report earnings tomorrow, as is JetBlue Airways Corp. (NASDAQ: JBLU). The consensus estimates call for United to post an EPS loss of -$1.03 on $8.58 billion in revenue and for JetBlue to post EPS of $0.08 on revenue of $1.19 billion.

The good news for airlines is that traffic is up, ticket prices have been raised, and some capacity has been wrung out. The wild card, of course, is fuel costs. Data from the International Air Transport Association (IATA) indicates jet fuel cost $3.245/gallon, down -2.4% from March, and down -1.9% from the same period last year. The IATA estimates the average cost for a barrel of jet fuel in 2012 will be $135, which will raise the industry’s total fuel bill by $41 billion over the year.

Delta’s shares are down about -0.3% in the early afternoon, at $10.45 in a 52-week range of $6.41-$11.60. US Airways’ shares are up 2.9% at $9.58, in a 52-week range of $3.96-$10.35.

The lightly traded Guggenheim Airline ETF (AMEX: FAA) is up 0.14% at $29.30 in a 52-week range of $23.82-$39.18.

Paul Ausick

Last week we noted that a deal between Delta Air Lines Co. (NYSE: DAL) and ConocoPhillips (NYSE: COP) might be getting closer to being done. The interesting thing about that deal is that JPMorgan & Co. (NYSE: JPM) would provide the crude oil for a Delta-owned refinery. Delta gets the jet fuel, JP Morgan trades the crude and the other refined products.

The Wall Street Journal reports that Sunoco is currently in discussions with soon-to-be-public Carlyle Group to form a joint venture to keep Sunoco’s 330,000 barrel/day Philadelphia refinery in operation. The reported deal between Sunoco and Carlyle appears to be very similar to the Delta-JPMorgan deal. Sunoco would contribute the Philadelphia refinery to the joint venture in exchange for a non-operating minority stake. The company would have no obligations to support the refining operations. Carlyle would adopt a role similar to Morgan’s proposed role with Delta.

The refined products that will be coming out of either refinery are almost incidental to this story. If the deals go through JPMorgan and Carlyle become commercial traders of crude and refined products, lowering their margin requirements, and potentially raising their returns from the sale and hedging of the refined products.

We’ll have to wait for the details if and when one of these deals gets done, but we could be seeing the start of something new in the refining business in the US.

Paul Ausick