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Shares of US airlines are getting cheaper on Monday, while growing geopolitical tensions in the Middle East fueled higher oil prices. The wave of sales put pressure on the Dow Jones Transportation Average, which fell 11 points, or 0.1%, although the Dow Jones Industrial Average gained 133 points. The NYSE Arca Airline Index fell 1.1%, while oil futures added 0.5% after rising 1.4% last week and closing at the multi-year high of Thursday.
Over the past 3 months, the correlation coefficient between the index of the aviation sector and oil futures was -0.87. A value of -1.00 would mean that they always move in opposite directions. "The margin remains under pressure as a result of rising fuel costs, an increase in non-fuel costs - mainly in the first half of the year - and only minimal success in raising tariffs to compensate for rising costs," says Cowen analyst Ellen Becker in the note to clients.
In the group of the most actively traded shares on Monday, Delta Air Lines Inc. fell by 0.7%, Southwest Airlines Co. - by 0.4%, American Airlines Group Inc. - by 0.5%, JetBlue Airways Corp. - by 0.7%. Meanwhile, shares of United Continental Holdings Inc. added 0.1%.