Wall Street Fades On Oil Rebound by Steve Schaefer:
A late-morning bounce in oil prices took the wind out of Wall Street's sails at midday Wednesday, overcoming a favorable report on U.S. manufacturing.
Crude fell sharply at the open Wednesday after dropping several dollars Tuesday, but recouped its losses by midday and was up 8 cents, to $128.93 a barrel.
Earlier, the Commerce Department's April durables report showed orders for long-lasting manufactured goods fell by a less-than-expected 0.5%, and they rose 2.5% excluding transportation orders, which have declined in the face of soaring fuel costs. (See: "Signs Of Life In Durable Orders")
Airlines are among those hit hardest by rising energy prices, and several have taken measures to combat the challenge.
Late Tuesday, JetBlue Airways (nasdaq: JBLU - news - people ) said it will delay plans to expand its fleet, by deferring the purchase of 21 Airbus A320 jets for five years. (See: "JetBlue Puts The Brakes On Expansion") Shares of the airline dropped 26 cents, or 5.95, to $4.15, as investors expressed displeasure with the move.
Soaring oil prices have also jogged talks of consolidation and collaboration in airlines and several other sectors.
On Wednesday, Germany's Deustche Post announced a deal to have parcel carrier UPS (nyse: UPS - news - people ) handle some air transportation for some deliveries of its struggling DHL unit. UPS said the potential 10-year pact could bring in revenue of up to $1 billion a year.
Shares of UPS were up $2.39, or 3.5%, to $70.79 by midday in New York.
Online travel company Expedia (nasdaq: EXPE - news - people ) was also higher, adding $1.46, or 6.7%, to $23.20, on speculation Chairman Barry Diller could attempt a leveraged buyout.
Such a move could set off another skirmish between Diller and Liberty Media chief John Malone. Liberty Media owns a 20% stake in Expedia, and recently fought Diller over the break-up of online conglomerate IAC/InterActive.
Stocks slipped from early gains, as the Dow was down 8 points, or 0.1%, to 12,540, the S&P lost 3 points, or 0.2%, to 1,383, and the Nasdaq fell 6 points, or 0.3%, to 2,475.
American International Group (nyse: AIG - news - people ) saw the sharpest fall by far among the blue chips, dropping $1.56, or 4.3%, to $35.06, after a Citigroup research report said the insurer's $20.0 billion in new capital may not be enough. The report also said investor confidence in management has been weakened by massive losses and subsequent capital raising, even while the insurer may be in store for even more hefty deficits.
Fellow Dow component General Electric (nyse: GE - news - people ) was off slightly, down 7 cents, or 0.2%, to $30.33, after Chief Executive Jeffrey Immelt mentioned several potential buyers for the conglomerate's appliances unit while speaking in Seoul, South Korea. (See: "Immelt Names Names In Contest For GE Appliances")
With many predicting the business could be sold to an Asian buyer, Immelt pointed to South Korea's LG Electronics (other-otc: LGEAF - news - people ) and China's Haier Group, among others, as candidates. Back To News
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