Airline stocks fall as oil prices rise
Airline stocks fall as the price of oil rises on fears of military strike in Syria
NEW YORK (AP) -- Airline stocks fell sharply Tuesday as the price of oil jumped on fears that the U.S. will order a military strike against Syria.
The price of U.S. crude shot up 3 percent to $180.90 Tuesday after U.S. Defense Secretary Chuck Hagel said American forces were ready to act on Syria as soon as President Barack Obama gives an order. Worries that there might be a strike against Syria increased Monday after Secretary of State John Kerry said it was "undeniable" that the Syrian government used chemical weapons.
Instability and turmoil in the Middle East tends to send oil prices higher.
While Syria is not a major oil supplier, traders are concerned that the conflict may draw in Iran, a key ally of Syria and a big oil producer. The Middle East nation also shares a border with Iraq, another larger oil producer in the region.
Jet fuel is the biggest expense for airlines. A rise in oil prices can greatly increase an airliner's costs.
Shares of United Continental Holdings Inc. had the biggest decline Tuesday afternoon. Its stock fell 7.2 percent, or $2.16, to $27.73. Shares of Delta Air Lines Inc. fell $1.25, or 6.2 percent, to $19.02.
Shares of AMR Corp., the parent company of American Airlines, fell 9 cents, or 2.8 percent, to $3.10. AMR's shares are not traded on the New Stock Exchange anymore since the company is in bankruptcy protection, but the stock can be traded over the counter.
Here's how other airline stocks fared Tuesday afternoon:
— Shares of JetBlue Airways Corp. fell 10 cents, or 1.6 percent, to $6.27.
— Shares of Southwest Airlines Co. fell 45 cents, or 3.4 percent, to $12.82.
— Shares of US Airways Group Inc. fell 67 cents, or 4.1 percent, to $15.54.
