Conflicts in Iraq are taking their toll on the markets. Oil prices shot higher over the past few days. Yesterday the price of Light Crude surged above its previous short-term highs at 105 (left chart below). If it's any consolation, oil prices have been higher in the past on four other occasions, so it's not as though we are in uncharted waters (right chart).
One of the immediate results of higher oil prices was a sell-off in transportation related names, primarily the airlines. In the five charts below we see Alaska Air Group (ALK), Delta Air Lines (DAL), JetBlue Airways (JBLU), Southwest Airlines (LUV), and United Continental (UAL). All five are components of the Dow Transports and all five were down an average of 5% yesterday during trading.
Investors are watching developments in Iraq closely, as continued trouble is likely to push oil prices even higher. This could provide a good entry point ... Log in or subscribe to continue reading.
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