Standard & Poor's Ratings Services has lowered its ratings on Southwest Airlines Co. (LUV), lowering the debt ratings to 'BBB' from 'BBB+’ and placing it with negative implications. However, Southwest has retained its investment grade rating. The downgrade reflects lower operating cash flow caused by record high fuel prices, low global demand for air travel and weak prices. The travel downturn has eroded the airline's flow of cash at a time when the airline faces substantial fixed obligations and declining cash balances. Southwest's cash balance fell to $902 million in the third quarter from $1.4 billion at the end of 2008. Recently, Southwest borrowed $124 million under a new term loan agreement secured by five Boeing 737-700 aircrafts. It also replaced its previous $600 million unsecured revolving credit facility with a new $600 million unsecured revolving credit facility that will expire in Oct. 2012. The rating ...

The producer price index for August came in at a much higher-than-expected 1.7% increase for the month, following a 0.9% decline in July and a 1.8% increase in June. The consensus expectation was for a rise of just 0.8%.

However, it was almost all because of higher energy costs. Core (ex food and energy) inflation was just 0.2% (just a notch higher than the 0.1% expected), following a 0.1% decline in July and a 0.5% increase in June. Energy prices rose 8.0% following a 2.4% decline in July and a 6.6% increase in June.

On a year-over-year basis, producer prices were 4.3% lower, but in July they were 6.8% lower. Core producer prices are up 2.8% on a year-over-year basis. The year-over-year numbers are going to start looking much hotter in the future, as most of the really big declines were in the fall of last year, especially in the fourth

...

It is high time for our political leaders to make some key decisions.  And that translates into large uncertainties for investors that have held the market in a range and with low volume. We do not know whether “Cap and Trade” legislation will pass the Senate and we do not know whether and any healthcare bill will pass through Congress, or what that bill might entail.  And these two issues are paramount for the future of America.  

As we discussed earlier, cap and trade could cause incremental costs in energy for all of the United States, particularly in all carbon-based generation of electricity.  Increasing these costs will make carbon-based energy less competitive with alternative sources, like solar and nuclear.  The benefits of this legislation will be less carbon emissions, cleaner air, less dependence on imported oil and the creation of new jobs in the alternative

...

Orion Marine Group Inc (OMGI) shares recorded an unusually low trading volume today. Shares rose almost 1% at $12.10 in the afternoon trading.

Zacks Investment Research

Highlights include Apartment Investment (AIV), Mid-America Apartment Communities (MAA), Marriott International (MAR) and Starwood Hotels & Resorts (HOT).The specter that has been haunting the markets is the specter of deflation. Those concerns have been partially assuaged by the release yesterday of the Producer Price Index (PPI) and of the Consumer Price Index today (CPI). The CPI came in at an increase of 0.4% on a headline basis, following a 0.3% rise in January.The increase was largely the result of higher energy costs, particularly for gasoline. Prior to these back-to-back increases, the headline CPI had declined for 3 straight months, by 0.8% in December and October, and by 1.7% in November. The fears that we were headed into deflation were clearly not unfounded.However, those declines were due to the collapse in energy prices. The Core CPI, which strips out volatile ...