NEW YORK (AP) â¿¿ A Citi analyst downgraded two airline stocks on Monday citing a likely slide in revenue, slower-than-expected global economic growth and reports of some tightening corporate travel budgets. Analyst Will Randow cut his rating on US Airways Group Inc. to "Sell" from "Hold" and United Continental Holdings Inc. to "Hold" from "Buy." He said he expects airlines will report revenue fell in late September and corporations tightened the travel pursestrings amid weakening consumer confidence and high unemployment. Airline revenue tends to track confidence and job report numbers because travel is a discretionary expense. Consumers are reluctant to spend with unemployment high, wages stagnant and gas prices at about $3.50 a gallon. Consumer confidence fell to recessionary levels in August, after lawmakers battled over raising the government's borrowing limit and Standard & Poor's cut its rating on long-term U.S. debt. Retail sales were also flat in August, a sign the turmoil caused consumers to pull back. Randow said he thinks airlines' plans to reduce flying should cushion the blow of any consumer pullback, but large network airlines still face stubbornly high costs and lower fuel efficiency than their low-cost competitors. He recommends investors buy shares of Alaska Air Group Inc., Spirit Airlines Inc. and Southwest Airlines Co. Airline stocks were led lower Monday by American Airlines parent company AMR Corp., which lost 9 percent, or 26 cents, to $2.70. Delta Airlines Inc. was the next-largest decliner, falling 38 cents, or 5 percent, to $7.12. United Continential fell 92 cents, or 4.8 percent, to $18.46. U.S. Airways fell 16 cents, or 2.9 percent, to $5.34. Most other airline stocks lost about 2 percent.
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