Stocks Fall Into Puddle of Oil
05/23/08 - 05:46 PM EDT
Sarina Penn
At the same time, airline stocks were pummeled after Standard & Poor's placed a number of carriers on credit watch with negative implications, citing ballooning fuel prices. The Amex Airline Index tumbled 4.2%. U.S. Airways (LCC Quote - Cramer on LCC - Stock Picks), whose stock rating was also yanked down to underperform from outperform at Credit Suisse, plummeted 19.5%.
United parent UAL (UAUA Quote - Cramer on UAUA - Stock Picks) sank 9.3% after saying it will raise all of its fares, and American Airlines parent AMR Corp. (AMR Quote - Cramer on AMR - Stock Picks), which said earlier this week that it will slash domestic capacity and charge customers for checked bags in order to offset pain caused by fuel prices, lost 4.6%. Continental (CAL Quote - Cramer on CAL - Stock Picks), Delta (DAL Quote - Cramer on DAL - Stock Picks), and Northwest (NWA Quote - Cramer on NWA - Stock Picks) declined at least 4.5% apiece. Also, CNBC reported that Dow component JPMorgan Chase (JPM Quote - Cramer on JPM - Stock Picks) has laid off at least 200 investment-banking executives over the past couple of days, according to people at the firm. The network said the move was unrelated to JPMorgan's plan to make room for incoming Bear Stearns (BSC Quote - Cramer on BSC - Stock Picks) employees by cutting into its own staff. In March JPMorgan agreed to take Bear out in a highly discounted Fed-backed deal, as the latter firm stood on the brink of collapse. Shares of JPMorgan moved down 1.7%. On the sparse winning side was Anheuser-Busch (BUD Quote - Cramer on BUD - Stock Picks). Shares shot up 7.7% after the Financial Times reportedunnamed sources as saying Belgium-based beer giant InBev is hammering out a $46 billion takeout attempt on the Budweiser brewer. The per-share bid is expected at $65 a share, said the paper. In earnings, information-technology firm CA (CA Quote - Cramer on CA - Stock Picks) issued bullish full-year guidance prompted by a 30% leap in bookings compared with last year, even as a tax charge dragged fiscal fourth-quarter results well below analyst estimates. Shares were climbing 3.9%.
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