Stocks quoted in this article:
UAL Corp. (UAL – 41-3/4) is the parent company of United Airlines. This morning before the opening bell, the firm revealed that it will suffer a third-quarter loss and possibly a loss for the fourth quarter as well. This is a result of last month's pilot strike, which caused thousands of flights to be canceled. Soaring crude oil prices have also negatively affected the shares.
Shortly after the firm's announcement, Merrill Lynch reduced its rating on the shares from a "long-term buy" to a "long-term accumulate." UAL has tumbled more than five percent, recording a new 4-1/2 year low at 40-1/4.
Other major airline equities are falling in sympathy with their peer: Delta Air Lines (DAL – 43-3/4) has shed over five percent, U.S. Airways (U – 30-3/8) is down 4.7 percent, Northwest Airlines (NWAC – 25-7/8) is in the red by nearly four percent, and AMR Corp. (AMR – 32-7/8) has recorded a five-percent loss. The AMEX Airline Index (XAL – 140.43) is trading 3.7 percent lower in early-afternoon activity.