Shares of United Continental Holdings Inc. and US Airways Group Inc. tumbled in New York trading Tuesday, dragging an industry index to the biggest drop in more than four months as jet-fuel prices jumped.
Jet fuel for immediate delivery in New York Harbor rose 1.4 percent to $3.29 a gallon, the highest since May 4. The Bloomberg U.S. Airlines Index plunged 6.4 percent, the most since Oct. 3.
United, the world’s biggest airline, fell 9.1 percent to $21.24 at the close in New York, while Tempe, Arizona-based US Airways slid 11 percent to $7.89. Delta Air Lines Inc., No. 2 in traffic behind United, slumped 7.2 percent to $10.05.
All 11 passenger carriers in the Bloomberg index declined today.
On Feb. 3, the gauge reached the highest since June as a U.S. stock rally gathered strength on optimism that the economic recovery was taking hold. The index has tumbled 11 percent since then, even as the broader Standard & Poor’s 500 Index has advanced 1.3 percent.
Jet fuel is approaching last year’s high of $3.42 a gallon, the most since 2008, when the price reached a record $4.36. Fuel accounted for 36 percent of Chicago-based United’s operating expenses last year, and 27 percent of those costs at US Airways, according to data compiled by Bloomberg.
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