Wednesday March 26, 04:57 PM
Airline sector sharply lower as crude spikes above $105 a barrel
NEW YORK (Thomson Financial) - Shares of airline companies slumped Wednesday, the first loss in four sessions, as a sharp jump in crude oil prices soured investor sentiment toward the sector.
The Amex Airline Index dropped 7.7% to 25.89, after running up 9.1% over the past 3 sessions. As of Tuesday's close, the index had gained 16% since closing at an all-time low of 24.24 on March 17.
Helping weigh on the airline sector tracker was a surge in crude futures. The May contract was up $3.75 at $104.97 a barrel, and had been up as much as $4.43 at the intraday high of $105.65 a barrel.
Earlier, the Energy Information Administration said crude oil inventories increased by 88,000 barrels during the week ending March 22, compared with expectations of a gain of about 1.7 million barrels.
Among the more-active air carriers, AMR Corp (NYSE: AMR - news) . fell 7.4% to $8.92. The parent of American Airlines said it voluntarily cancelled about 200 flights Wednesday to re-inspect the MD-80 aircraft to 'make sure' wiring is installed and secured 'exactly' according to Federal Aviation Administration directives. The company said the process could take up to several hours per aircraft.
Elsewhere, Delta Air Lines shed 11% to $8.88, putting the stock on track to close at its lowest price since the company came out of bankruptcy a year ago.
Northwest Airlines (NWACQ.PK - news) slid 9.4% to $9.10, Continental Airlines (NYSE: CAL - news) descended 8% to $19.47, UAL Corp (NASDAQ: UAUA - news) . lost 7.8% to $22.14, US Airways dropped 7.3% to $8.45, Southwest Airlines (NYSE: LUV - news) gave up 4.6% to $11.89 and JetBlue Airways (NASDAQ: JBLU - news) declined 4.8% to $5.57.
Tomi Kilgore
tk1
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