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4 May, 2020 15:16

Airlines’ steep losses sink Dow Jones by over 300 points as Buffett dumps holdings in troubled sector

Airlines’ steep losses sink Dow Jones by over 300 points as Buffett dumps holdings in troubled sector

US stocks dipped at the start of the trading week, with air companies’ leading losses after billionaire investor Warren Buffett revealed his Berkshire Hathaway had unloaded shares in the four largest US airlines.

The Dow Jones Industrial Average was down nearly 350 points or around 1.5 percent shortly after the opening bell. While other key US indices, the S&P 500 and the Nasdaq Composite, also lost around one percent as trading started on Monday, the latter reversed the losses less than an hour later and was up less than 40 points.

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US air carriers’ stocks fell sharply and were among the biggest losers in the S&P 500. Southwest Airlines, Delta, United, American Airlines – the four companies Buffett’s conglomerate dumped – saw their shares down between five and seven percent. The decision affected the performance of other air industry heavyweights, as US aerospace giant Boeing also plunged over three percent.

The billionaire’s disappointment in the airlines’ performance comes as the industry suffers from the coronavirus outbreak, which has nearly brought travel around the globe to a halt. US airlines were forced to ground thousands of planes and seek government help to stay afloat.

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Apart from the blow to the air sector, investors could also be spooked by rising tensions between the US and China, which have already reignited trade war fears. The rising tensions between Washington and Beijing and the US tariff threat over the coronavirus wreaked havoc in the European and Asian markets earlier in the day. The major indices of London, Paris, and Frankfurt dipped between two and three percent, while shares trading on Hong Kong’s stock exchange shed over four percent.

For more stories on economy & finance visit RT's business section

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