Airline stocks fall as oil prices soar

Airlines, cruise lines and other companies in fuel-dependent industries dragged down U.S. stock indexes Monday after a weekend attack on Saudi Arabia’s biggest oil processing facility sent crude prices soaring.

The U.S. and international benchmarks for crude leaped more than 14% — comparable with the 14.5% jump in oil on Aug. 6, 1990, after Iraq’s invasion of Kuwait.

The Dow Jones industrial average fell 0.5%, breaking an eight-day win streak. The Standard & Poor’s 500 index was down modestly, though it was the biggest decline in two weeks. American Airlines was the biggest decliner in the index.

Oil producers’ stocks jumped, and prices rose for Treasurys, gold and other investments that are seen as less risky.

The weekend attack halted production of 5.7 million barrels of crude a day, more than half of Saudi Arabia’s global daily exports and more than 5% of the world’s daily crude oil production. President Trump said the United States was “locked and loaded” to respond as his administration pinned the blame on Iran, which supports the Yemeni rebels who claimed responsibility for the attack.

The attack raised worries about the risk of more disruptions in the supply of oil at a time when the global economy’s strength is seen as shaky. Still, analysts expressed doubts that the disruption in Saudi Arabia’s oil production would have much of an effect on the U.S. economy, at least in the short term.

“From a global perspective, there’s probably a concern,” said Willie Delwiche, investment strategist at Baird. “From a U.S. perspective, we produce more now than we used to, and our economy is less dependent on oil than it used to be.”

The S&P 500 fell 9.43 points, or 0.3%, to 2,997.96 — the index’s largest loss since Sept. 3. The Dow fell 142.70 points to 27,076.82. The Nasdaq fell 23.17 points, or 0.3%, to 8,153.54.

Smaller-company stocks were better performers. The Russell 2000 index rose 6.46 points, or 0.4%, to 1,584.60.

The stock market has been volatile for months as worries wax and wane about the U.S.-China trade war. Stocks’ most recent move had been up, boosted by renewed optimism in recent weeks about easing tensions between Washington and Beijing, and the S&P 500 had climbed back within 1% of its record.

Stocks lost their recent upward momentum Monday as investors weighed the implications of the attack in Saudi Arabia.

Benchmark U.S. crude oil soared $8.05 to settle at $62.90 a barrel. Brent crude oil, the international standard, jumped $8.80 to close at $69.02 a barrel.

That helped energy stocks in the S&P 500 surge 3.3%.

The surge in oil prices weighed on shares of airlines, whose operations can be hurt by rises in fuel prices. American Airlines Group, which spent $3.7 billion on fuel and taxes in the first half of the year, dropped 7.3%. United Airlines slid 2.8%, and Delta Air Lines fell 1.6%.

Cruise ships also burn lots of fuel, making them vulnerable to oil price swings. Carnival shares fell 3.2%.