Market Overview

Afternoon Movers: Delta, Hertz, Research in Motion

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US equities were trading lower today, with the S&P 500 Index trading down by around .4%.

This afternoon, these three stocks were greatly underperforming broader stock markets:

Delta (NYSE: DAL): Shares of this airline traded more than 11% lower today, after the company released May passenger unit revenue lower than recent management guidance. Also, oil prices increased today by around 1.1% as measured by the iPath Oil ETF (NYSE: OIL). This has implications for gasoline, a key cost for airlines.

Shares of competing airline United Continental (NYSE: UAL) also traded sharply lower, perhaps in anticipation that it might also report disappointing May performance.

Hertz (NYSE: HTZ): This airport car rental company traded around 3.6% lower today, perhaps related to downward price movements in airline stocks (discussed above). Hertz has a high beta close to 2.58, meaning that it is sensitive to broader stock market moves.

One analyst told Benzinga that Hertz's downward price movement today might be a result of general economic concerns. If the global economy were to take a downturn, businesses and consumers might cut their travel budgets, which would hurt airlines and car rental companies. Other car rental companies, such as Dollar Thrifty (NYSE: DTG) and Avis Budget Group (NASDAQ: CAR), were also trading lower today.

Research in Motion (NASDAQ: RIMM): Shares of this phone provider traded more than 6% lower today, as general concerns persisted that its Blackberry phones might not be able to compete with other smartphones. Analysts told Benzinga that they did not know of any firm-specific news released today could be affecting Research in Motion's stock price. Late last month though, Research in Motion announced that it was hiring investment banks to help it evaluate its business.

Analysts told Benzinga that they were not quite sure what RIMM's fate would be. One analyst said the company could not prosper without selling itself. Another analyst recommended that the company outsource its hardware and focus on software.

RIMM, like Hertz, is a high beta stock. It currently has a beta of around 1.73.

Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.

Posted-In: Long Ideas News Short Ideas Movers & Shakers Movers Tech Trading Ideas General Best of Benzinga

 

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