Sector Snap: Airlines mostly fall as oil rebounds

Airlines mostly fall as oil rebounds; Continental in the green after jumping to new team

• On 2:38 pm EDT, Tuesday October 27, 2009

NEW YORK (AP) -- Continental Airlines was the only airline stock gaining ground Tuesday afternoon, after it announced its long-awaited official jump to a new airline alliance.

The move gets Continental out from under the shadow of Delta Air Lines and could mean a bigger piece of international revenue that is shared among team members. It will also bring Continental closer to United Airlines. The two talked extensively about combining last year before Continental walked away. Now they will work together on marketing and pricing in the next closest thing to a merger.

Elsewhere in the sector, airline stocks were dragged down by rebounding oil prices, which had declined for the past three days.

Benchmark crude for December delivery rose 91 cents around midday to $79.59 a barrel on the New York Mercantile Exchange. The contract fell $1.82 to settle at $78.68 on Monday.

Meanwhile, the broader market wavered amid mixed reports on home prices and consumer confidence.

In afternoon trading, US Airways led the declines, falling 18 cents, or 5.3 percent, to $3.19. Delta, United and AirTran all lost about 2 percent. Continental gained 14 cents to reach $12.17.