Sector snap: Airline stocks waver as oil climbs

The Amex Airline Index was nearly flat at 22.28 in early afternoon trading. Broader indexes declined, with the Dow Jones industrial average down 0.4 percent to 12,819.32.

Oil prices resumed their upward climb following reports that Iran is planning to cut crude oil production. Light, sweet crude for June delivery rose as high as a record $126.98 a barrel on the New York Mercantile Exchange, recently trading up $1.47 at $125.70.

Airline stocks often move opposite oil prices because fuel represents many carriers' biggest expense.

Air Transport Association said it expects planes to fly nearly 85 percent full this summer, suggesting carriers are finding a balance between their capacity cutbacks and customer demand.

Overall, the trade group forecast 211.5 million passengers will travel on domestic carriers between June 1 and Aug. 31, a 1.3 percent drop from last summer. Last summer's total of 213.8 million passengers was a record.

Among the sector's gainers Tuesday was market leader American Airlines' AMR Corp., which rose 12 cents to $8.69.

Decliners included UAL Corp., the parent of No. 2 United Airlines, which fell 55 cents, or 3.9 percent, to $13.45, and Southwest Airlines Co., which fell 30 cents, or 2.3 percent, to $13. Continental Airlines Inc. fell 8 cents to $17.39.