Airlines See Record Low Passengers, Stocks Rise Anyway

United Airlines (Ticker: UAUA) stock has been on a steady descent since the beginning of this week, but this morning the stock had a serious, positive reversal.

On Monday, UAUA opened above $12 per share. This morning, shares dropped as low as $9.39 apiece. Shortly after 1 P.M., UAUA shares took flight, rising to $11.72 and virtually erased the week’s losses. What did it?

Here’s one thing that didn’t do it: This afternoon, I saw a pretty dull report from the Department of Transportation on air travel in October. According the report, airlines carried 7.1 percent fewer people in 2008 as opposed to the year prior.

The culprit: The only thing that impacts a transportation company so massively is…OIL! Take a look at today’s MarketWatch chart for oil and the chart for UAUA.

Right around 1 P.M., oil reached its low for the session, which was more than a 10 percent drop from yesterday’s close.  

By the end of the day, oil reversed half of its losses and guess what UAUA did? It reversed closed to half of its gains.

These huge swings reflect a high degree of pricing uncertainty. I can’t wait to see the return of lower volatility to the stock and commodity markets. Unfortunately, I don’t know if or when they will cease. :(

In the midst of typing this, Brian Williams interrupted the Ellen DeGeneres Show to report on a plane which appears to have splash landed in the Hudson River.

US Airways Flight 1549 hit the water and did not immediately sink. Rescue workers are on the scene putting passengers on ferries and I am hoping everyone aboard will be found in good health and evacuated safely.

(Image source: Picapp)