Airlines Make Gains Whilst Oil Falls

Investors found shelter in airline stocks Tuesday as oil prices fell below $53 a barrel, but numerous economic reports showed signs of the recession's growing severity.

Several of the biggest U.S. carriers posted double-digit gains in midday trading, adding to similar gains on Monday. Meanwhile, the Dow Jones Industrials Average recovered slightly after falling briefly into negative territory.

In midday trading, light, sweet crude for January delivery was down $1.70 to $52.80 a barrel on the New York Mercantile Exchange. Prices ranged between $50.79 and $54.66 earlier. Also Tuesday, the government introduced a pair of new programs that will provide $800 billion to help loosen the market for consumer debt.

Shares of United Airlines parent UAL Corp. rose $1.79, or 20.2 percent, to $10.64, and Delta Air Lines Inc. added 89 cents, or 12.1 percent, to $8.24.

American Airlines parent AMR Corp. gained 47 cents, or 6.1 percent, to $8.13, while Continental Airlines Inc. gained $1.69, or 12.8 percent, to $14.95. US Airways Group Inc. rose 46 cents, or 9 percent, to $5.57.

But questions about consumers' ability or propensity for traveling lingers. Earlier Tuesday investors faced a Commerce Department report that said the economy declined more than expected in the third quarter, and a report that said home prices have fallen to levels not seen since in more than four years.

Author: Jo Amey