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US: Airline shares tumble as stocks retreat

Tuesday, March 7, 2017 - 06:49

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[NEW YORK] Airline shares tumbled on Monday following a gloomy forecast from Delta, as US stocks pulled back amid concerns about political uncertainty and higher interest rates.

Stocks spent the whole day in the red, with analysts pointing to a variety of concerns, including the lack of progress on President Donald Trump's economic agenda and the prospect of the Federal Reserve raising interest rates next week.

The Dow Jones Industrial Average dropped 0.2 per cent to end the day at 20,954.34.

The broad-based S&P 500 shed 0.3 per cent to 2,375.31, while the tech-rich Nasdaq Composite Index dropped 0.4 per cent to 5,849.17.

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Market voices on:

News out of Washington has been dominated by controversy about the Trump administration's dealings with Russia, delaying action on tax cuts and other growth measures awaited by investors.

"Investors are getting frustrated that there is a lot of news coming out of the administration but there is not a lot of action," said Jack Ablin, chief investment officer at BMO Private Bank. "Nothing has really pushed forward."

Delta dropped 2.2 per cent after it said revenues were coming in at the low end of expectations and higher costs were pinching profits in the current quarter. United Continental and American Airlines each lost more than three per cent.

Auto giant General Motors fell 0.8 per cent after disclosing that it will take a charge of up to US$4.5 billion mostly due to pension expenses associated with the sale of its European subsidiary to French carmaker PSA for 2.2 billion euros (SS$3.3 billion).

Tyson Foods lost 2.5 per cent after a chicken farm affiliated with the food giant suffered an outbreak of avian influenza. The birds, found in the southern state of Tennessee, were destroyed.

Snapchat parent Snap tumbled 12.1 per cent following a cautious appraisal by an analyst at Needham & Co. The social media giant surged last week in its market debut.

AFP

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