Tuesday US Stock Market Recap: Airline Stocks Affected By Delays

The markets were fairly calm Tuesday, the major indexes were never more than +/- 0.75% at any point during the trading session. To the right, you can see the daily chart of the S&P 500.

Volume was weaker than average, I think this probably has to do with either the long weekend coming up or the amount of uncertainty stemming from the Russia/Georgia crisis among many other things. The remainder of the week brings us a considerable amount of data, here are a few key things to watch out for during the remainder of this trading week:

• Wednesday - Crude oil inventory report and refinery utilization report
• Thursday - Preliminary GDP estimate
• Thursday - Natural gas inventory report
• Friday - Consumer sentiment report

I definitely would not be surprised if you saw massive volatility around 10:35am on Wednesday and Thursday. The energy markets this week has been affected by the Russia/Georgia situation taking suffering larger declines than any other sector.

Bernanke and the Federal Reserve released their minutes today and it seems almost a guarantee that they will be holding the Federal Funds Rate at 2% at the next meeting on September the 16th. This news shouldn’t weigh on the markets for the rest of this week and I would expect that Thursday’s GDP number will be much more important.

The airlines are having problems again and a glitch in the flight control systems caused a number of delays and cancellations today. Delta Airlines (DAL) was down big along with US Air (LCC) and the rest of the sector. These stocks have actually bounced way off of their annual lows but I would be very cautious going forward because if crude races back up I would expect these stocks to race down even faster.

Mattel Inc. (MAT) won only $100 million dollars in their Bratz lawsuit after hours and the stock closed the extended trading session down $0.29 to $19.95. If this sort of news doesn’t move the stock price that much I doubt we are going to see a ton of stock specific volatility going forward.

Disclosure: The author does not hold any positions in the companies mentioned.

Posted in Categories: Airlines, Contributor, External Research, Stocks, USA.

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