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Saturday 20

October, 2018 3:34 PM



Airlines, chemical shares fall as US stocks stagnate

Airlines, chemical shares fall as US stocks stagnate

Shares of airlines and chemical companies were big losers on Tuesday as Wall Street stocks faced another day of pressure over higher interest rates.

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10.10.2018 08:27 AM

Shares of airlines and chemical companies were big losers on Tuesday as Wall Street stocks faced another day of pressure over higher interest rates.

Major indices ended a choppy session little changed, with the Dow Jones Industrial average shedding 0.2 percent to 26,430.57.

The broad-based S&P 500 shed 0.1 percent to 2,880.34, while the tech-rich Nasdaq Composite Index edged up less than 0.1 percent to 7,738.02.

Investors have been nervous since the yield on 10-year US Treasury bonds surged above 3.0 percent last week. On Tuesday, the yield retreated slightly to 3.21 percent.

Analysts fear the Federal Reserve will accelerate the pace of interest rate hikes due to concerns about higher inflation. The market will be closely scrutinizing inflation reports that will be released in the coming days.

Strong US data are "leading to an increasingly hawkish chorus of Fed speak," said a note from Oxford Economics.

Fed policymakers currently forecast four more interest rate hikes by the end of 2019, a pace of tightening that not all market players may have priced in to their investments.

American Airlines plunged 6.6 percent after disclosing that it canceled about 2,100 flights in September due to Hurricane Florence. Both Delta Air Lines and United Continental also shed more than two percent.

Paints and coatings maker PPG slumped 10.1 percent after projecting third-quarter earnings would be below analyst expectations due to higher raw materials and logistics costs.

Others in the chemical and materials sectors also fell sharply, including DowDuPont, down 3.7 percent, Sherwin-Williams, down 4.0 percent and Alcoa, down 2.9 percent.

Starbucks jumped 2.1 percent after activist investor Bill Ackman announced it built a stake in the coffee company.
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