Shares of AMR Corp., the parent of American Airlines, are recovering in late-morning trading after taking significant hits Monday and in premarket trading.

Shares are up 0.91 percent to $2.79 in late-morning trading.

The stock price fell to as low as $2.61 Monday before climbing to a 6 percent loss from its previous close. Once the stock price reached its daily low, trading of the company was halted briefly before resuming.

The drop in share price was likely caused by American Airlines failure to reach a labor dealwith its pilots union, the Allied Pilots Association. The airline and the union are continuing discussions Tuesday.

Our goal was to have an agreement established by the end of the weekend and we made significant progress in our discussions on scope, work rules, benefits and other outstanding items, AMR spokesperson Missy Cousino told MarketWatch. She told news sources that progress had been made on issues such as work rules and benefits.

Shares of AMR are well off of its 52-week high of $8.98. Tight consumer budgets, along with higher fuel prices, have led to difficult times for the company. In the second-quarter, AMR posted a net loss of $284 million.

There is speculation among analysts that the company will soon file for bankruptcy, something that the company has denied.

Third quarter earnings for the company will be released Wednesday afternoon.

Write to Samuel Weigley at