Sector snap: Airline stocks fall as oil stays high

The Amex Airline Index sank 1.8 percent to 18.87 in early afternoon trading. The Dow Jones industrial average advanced, rising 0.5 percent to 12,271.28.

Oil prices eased mildly following Friday's unprecedented surge, but nonetheless remained stuck above the $135 a barrel mark. A jump of nearly $11 at the end of last week drove airline shares and the broader market down sharply.

On Monday, light, sweet crude for July delivery fell $2.74 to $135.80 a barrel in volatile trading on the New York Mercantile Exchange.

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

A number of major carriers sought to recoup more of the costs over the weekend by raising most domestic roundtrip fares by $20. AMR Corp.'s American Airlines, the biggest U.S. carrier, launched the increase Saturday and was quickly matched by some of its biggest competitors.

It was unclear whether the increase would stick, however. Continental Airlines Inc. was among the carriers that matched the increase over the weekend, but it rolled the higher prices back Monday, according to airfare research site FareCompare.com, raising the possibility that other airlines might undo their hikes as well.

AMR shares fell 17 cents, or 2.4 percent, to $6.96. Continental shares fell 11 cents to $13.76.

Meanwhile, JetBlue Airways Corp. said it will buy Verizon Communications Inc.'s in-flight calling service, Airfone. Financial terms of the deal were not disclosed.

JetBlue shares fell 4 cents to $4.