Airline Sector Moves To The Downside Wednesday Morning

Wed. August 27, 2008; Posted: 10:59 AM

(RTTNews) - The airlines stocks are experiencing selling pressure Wednesday morning. The sector-wide weakness comes amid higher oil prices and after AMR Corp. (AMR | Quote | Chart | News | PowerRating) shares were downgraded by Citigroup.

By 10:40 am Eastern Time, Northwest stock was down 98 cents to $8.57 a share, while shares of UAL Corp. were down $1.23 to $9.92 and Delta shares were down 71 cents at $7.23.

Crude oil rallied again on Wednesday as Tropical Storm Gustav heads towards the Gulf of Mexico. October crude oil climbed to $118.94, up $2.67 on the session. Prices reached as high as $119.63 in the early going.

Gustav could turn back into a hurricane later today or tomorrow. As a hurricane, Gustav reached landfall in Haiti on Tuesday afternoon, causing killer landslides.

The storm is predicted to reach the Gulf of Mexico over Labor Day weekend, leading to concerns the oil supplies from the region could be disrupted.

Before the opening bell on Wednesday, Citigroup downgraded AMR's stock to "sell" from "hold" in a note on U.S. airlines, as the firm raised its price targets after last month's drop in oil prices. However, Citigroup expects AMR to have further equity raises to cap share prices.

Also on Wednesday, Southwest Airlines Co. (LUV | Quote | Chart | News | PowerRating) said that it will cut 196 flights early net year, in an attempt to deal with higher fuel costs and continuing economic struggles.

The cut represents nearly 6% of Southwest's daily flight schedule, which is around 3,400 flights.

On Tuesday, AirTran had its debt downgraded by Standard & Poor's further into junk status. S&P cut AirTran's debt and corporate credit rating to CCC-plus from B-minus.

However, S&P did reaffirm its ratings for Delta, despite the odds that high fuel prices will create a sizeable loss for the company in 2008. The ratings agency affirmed Delta's B long-term corporate credit rating and removed the ratings from a credit watch but said Delta's outlook is negative.

For full details on Amr Corporation (AMR) click here. Amr Corporation (AMR) has Short Term PowerRatings of 4. Details on Amr Corporation (AMR) Short Term PowerRatings is available at This Link.

More News: Market Updates | Stock Alerts | All Trading News | Stock Index

Archives

Feedback

Email Article Link

Close X

RELATED SITES

Please call 1-213-955-5858 ext. 1

Tax Relief Bank Levy Wage Garnishment

Disclaimer:

The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.

It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

The Connors Group, Inc.
15260 Ventura Blvd., Ste. 2200
Sherman Oaks, CA 91403

All analyst commentary provided on TradingMarkets.com is provided for educational purposes only. The analysts and employees or affiliates of TradingMarkets.com may hold positions in the stocks or industries discussed here. This information is NOT a recommendation or solicitation to buy or sell any securities. Your use of this and all information contained on TradingMarkets.com is governed by the Terms and Conditions of Use. Please click the link to view those terms. Follow this link to read our Editorial Policy.