AMR Shares Drop on Bankruptcy Worries

NEW YORK ( TheStreet) -- Shares of AMR Corp. ( AMR), the parent company of American Airlines, fell sharply Monday as the recession fears bringing down the broad market weighed heavily on the airline stocks.

A number of media reports cited fresh concerns about a potential filing for bankruptcy protection by AMR for the plunge in the stock, mostly attributing the worries to industry analysts. Reuters quoted an AMR spokesperson as saying pursuing that route "is certainly not our goal or preference."

AMR shares were recently quoted at $1.83, down 38%, on volume of 25.5 million, more than double the issue's trailing three-month average daily churn of 11.7 million. Earlier in the session, the stock scraped a low of $1.75, its worst intraday level since March 2003.

Among the other airline stocks, United Continental ( UAL) was down more than 10% at $17.28; Delta Airlines ( DAL) was off 9% at $6.80; US Airways ( LCC) was losing 14% to $4.72; and Southwest Airlines ( LUV) was falling more than 6% to $7.57.

>>>Bankruptcy Scores: Ranking the Airlines

The major U.S. equity indices were sliding nearly 2% on Monday afternoon, getting the fourth quarter off to a poor start after a dismal third quarter that saw stocks dragged lower by fears that the U.S. economy may be sinking into a double-dip recession and concerns about sovereign debt contagion in Europe.

-- Written by Michael Baron in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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