Sector Snap: Airline stocks extend gains as oil prices fall
NEW YORK—Airline shares jumped Thursday, besting advances in the broader market, as oil prices continued their retreat away from record levels.
The Amex Airline Index surged 5.2 percent to 24.67 at midday. It was the sixth straight day of gains for the 14-stock index. The broader market also advanced, with the Dow Jones industrial average gaining 0.6 percent to 12,897.72.
Oil prices continued to slide as the dollar gained more traction against the euro and other currencies. Light, sweet crude for June delivery fell $2.53 to $110.93 a barrel on the New York Mercantile Exchange, leaving prices more than $9 below highs earlier in the week.
Airline shares often move opposite oil prices because fuel now accounts for many carriers' biggest cost.
American Airlines parent AMR Corp., the nation's biggest carrier, was among the sector's biggest gainers. In the U.K., shares of British Airways PLC also jumped amid speculation about closer ties the carriers and Continental Airlines Inc. may forge.
BA said late Wednesday it was "exploring opportunities for cooperation" with the two U.S. airlines.
AMR shares surged $1, or 11.4 percent, to $9.77. Continental shares rose $1.58, or 8.8 percent, to $19.56.
Shares of United Airlines parent UAL Corp. and US Airways Group Inc. also rose sharply as investors continued to anticipate word of a possible deal between the two. The carriers are reportedly in advanced talks and close to announcing a deal.
UAL shares rose $1, or 6.7 percent, to $15.90. US Airways shares rose 84 cents, or 9.8 percent, to $9.43.
