Airlines shares tumble amid rising Covid cases

Shares of U.S. airlines fell early Monday as a slight increase in Covid-19 cases raised concerns about the economic recovery and hit one of the sectors most closely linked to easing pandemic restrictions particularly harshly.

American Airlines and United Airlines were each down more than 6% in morning trading on Monday. Delta Air Lines lost more than 5% and Southwest Airlines lost almost 5%. The Hilton and Marriott hotel chains lost more than 3% and 4% respectively.

Travel demand has jumped since the spring, and Delta and American airlines last week posted optimistic outlooks on a surge in bookings. The Transportation Security Administration screened nearly 2.23 million people at U.S. airports on Sunday, the highest number since February 28, 2020, weeks before the World Health Organization declared Covid-19 a pandemic.

But concerns over the rapidly spreading delta variant of Covid, now the dominant strain in the United States, weighed heavily on the market on Monday. Travel stocks that are sensitive to the number of cases and the restrictions that accompany it have declined more than other sectors.

Some pandemic rules are coming back due to the increase in cases. Los Angeles County reinstated an indoor mask warrant last week, even for those vaccinated, due to an increase in Covid-19 cases there. The Southern Nevada Health District, which covers Las Vegas, is also urging everyone to wear masks indoors as cases increase statewide.

In the United States, cases have jumped about 66% over the past week to a seven-day average of around 32,300 new cases per day, according to a CNBC analysis of data compiled by Johns Hopkins University .