Why Airline Shares Jumped Higher Today
I've been saying for a while now that as long as the COVID-19 pandemic is dominating headlines airline shares are likely to trade as a group, focused on hints about future demand, rather than simply based on company-specific news. On Tuesday morning, we saw an illustration of this phenomenon.
On Tuesday shares of United Airlines Holdings (NASDAQ: UAL), American Airlines Group (NASDAQ: AAL), and Delta Air Lines (NYSE: DAL) all traded up more than 5% based on positive commentary from Southwest Airlines (NYSE: LUV), yet Southwest shares didn't climb as high as shares of its rivals.
Airlines have been in a free fall due to the pandemic, with revenue down 80% or more year-over-year and customers refusing to take to the skies. The entire sector plummeted early in the pandemic, and in the months since, the stocks have largely traded in tandem based on positive or negative headlines surrounding the pandemic and how long it might take for travel demand to recover.
Source Fool.com
