Why Air Travel Stocks Are Falling Today
The "Santa Clause Rally" was zapped by the Grinch on Thursday, with the Dow Jones Industrial Average down more than 700 points on fresh data that has investors worried about the quarters ahead. Air travel, which so far has largely flown above the growing economic malaise, was hit harder than the broader markets on concerns that if the economy weakens, demand is bound to fall.
Shares of Boeing (NYSE: BA) fell as much as 5.3% on Thursday, while shares of United Airlines Holdings (NASDAQ: UAL) were down 4.7%, and engine-maker General Electric (NYSE: GE) lost 3.3%.
The airline sector has done remarkably well this year, considering the circumstances. Typically, in times of economic distress, airfare is an expense that leisure and corporate customers defer, leading to a falloff in demand. But two years of limited travel due to the pandemic created an upswell in pent-up demand, which has held up well so far and should be able to keep things going.
Source Fool.com
