Airline stocks fall, weigh on Dow transports as oil prices rise
Airline stocks fell Monday, as rising geopolitical tensions in the Middle East helped fuel a rise in oil prices. The selloff is weighing on the Dow Jones Transportation Average , which is down 11 points, or 0.1%, despite the Dow Jones Industrial Average was surging 133 points. The NYSE Arca Airline Index slumped 1.1%, while crude oil futures rose 0.5%, after running up 1.4% last week, and closing at a multi-year high on Thursday. Over the past three months, the correlation coefficient between the airline index and crude oil futures has been -0.87, where -1.00 would mean they always move opposite directions. “Margins remain under pressure as a result of rising jet fuel costs, non-fuel costs increases that are heavily weighted to the first half of the year, and only minimal success raising fares to offset rising costs,” analyst Helane Becker at Cowen wrote in a note to clients. Among the more active airline stocks on Monday, those of Delta Air Lines Inc. slumped 0.7%, Southwest Airlines Co. slid 0.4%, American Airlines Group Inc. shed 0.5% and JetBlue Airways Corp. gave up 0.7%. Meanwhile, United Continental Holdings Inc.’s stock inched up 0.1%.
Source : MTV
