Boston, MA 06/12/2014 (wallstreetpr) – Provider of air transportation for passengers and cargo, Delta Airlines, Inc. (NYSE:DAL) suffered the most on Wednesday’s trading following the reduction in global economic outlook by the World Bank. The drop in stock price is probably the most in two months. The sentiments also followed by Deutsche Lufthansa AG (ADR) (OTCMKTS:DLAKY) announcing a cut in its earnings guidance.
Shares of Delta Airlines took a beating on Wednesday when it suffered a loss of 2.89% at the close of trading. At one point of time, the stock dropped as much as 4.87%. The volume of trading was also significantly higher than the preceding three days of trading. While a total of 23.35 million shares changed hands on June 11, it was only 7.03 million, 9.51 million and 8.47 million shares of trading respectively on the preceding three days of trading.
The pattern of trading on June 11 clearly indicated the panic striking among investors. Their panic is very well understandable. It is because another airline company, German-based Lufthansa has cut its operating profit to one billion euros or $1.35 billion in 2014 from approximately 1.5 billion euros projected earlier. The company has also slashed its 2015 guidance by 650 million euros to 2 billion euros. It has also reflected in the bourse where its stock plummeted 14.25%.
As a result, not only Delta Airlines, but other airlines too suffered at the hands bears. For instance, United Continental Holdings (NYSE:UAL) witnessed a drop of 5.23%, whereas low cost carrier Southwest Airlines Co (NYSE:LUV) managed with a loss of 1.28% only. American Airlines Group Inc (NASDAQ:AAL) recorded a drop of 2.38%.
World Bank Forecast
During the day, World Bank has predicted the worldwide economy to grow at a pace of 2.8% in the current year. This is 40 basis points lower than its outlook of 3.2% predicted earlier. It also reflected in major indices registering a fall in the U.S.
It was probably a coincidence that World Bank forecast and Lufthansa cutting its guidance came together triggering panic. It is because Lufthansa had its own problem of tackling labor union strikes, which would undoubtedly impact its results, though the quantum would have remained a concern for investors.