Airlines Off on Oil Worries
Airline stocks slid Monday as investors worried about a rebound in crude oil prices.
The Amex Airline Index was down 1.4%. Shares of American Airlines parent
AMR
(AMR)
were off 21 cents, or 2.4%, at $8.69;
Continental
(CAL) - Get Caleres, Inc. Report
fell 22 cents, or 2.1%, to $10.43;
Delta
TheStreet Recommends
(DAL) - Get Delta Air Lines, Inc. Report
lost 22 cents, or 3.3%, to $6.38;
Southwest
(LUV) - Get Southwest Airlines Co. Report
was down 14 cents, or 0.9%, to $15.20; and
Northwest
(NWAC)
was down 31 cents, or 3.2%, to $9.39.
Airline stocks are sensitive to crude oil prices, which hit a closing record high of $55.17 late last month. Jet fuel is the second-largest cost for airlines behind labor expenses, and surging fuel costs caused third-quarter losses at most carriers. For example, American Airlines reported a third-quarter loss of $214 million and said fuel prices were $342 million higher in the quarter than a year earlier.
Earlier in Monday's session, the January crude oil futures contract climbed above $49 a barrel to hit its highest price in more than two weeks. Later, though, the contract price eased, recently falling 20 cents to $48.69. On Friday, traders bid up prices 5% on growing concerns about heating oil supplies ahead of winter.
