Delta (DAL, $9.97, down $0.51) and Northwest (NWA, $11.27, up $0.05) announced they will merge to create the world’s largest carrier. I mentioned over the weekend that the Airline sector could eventually trade higher but needed to consolidate to offset rising jet fuel cost and other expenses. The deal between Delta and Northwest could get the ball rolling for other companies to merge. Early word is that United (UAUA, $22.91, down $0.71) and Continental Airlines (CAL, $21.87, down $0.02) could be next. All of these stocks were positive at the opening bell but are mixed as trading gets underway.

Crocs (CROX, $11.67, down $6.12) is getting hammered after cutting first quarter guidance. Analysts had expected the company to report earnings of 46 cents a share. Crocs is now saying earnings will come in between $0.08 and $0.13 a share after announcing plans to shut down its Canadian plant. Drum-roll please…Crocs use to be a $75 stock (52-week high).

Intel (INTC, $20.65, down $0.04) reports earnings after the bell today. Expect a 5%-8% move on Wednesday but calling the direction could be tricky. On March 3 the company warned about weakness in its memory chip business. However, shares could get a pop if Intel continues to take market share away from AMD (AMD, $5.63, down $0.23) which is sitting at 52-week lows.

Rick Rouse