Stocks tumbled for a second straight day on Thursday as sectarian violence in Iraq caused global unrest, and sent oil prices soaring. The U.S.-trained Iraqi military has been easily ceding ground to Sunni forces, a situation that has brought Shiite-led Iran to come to the Iraqi leadership's side. Delta Air Lines (NYSE:DAL), Cliffs Natural Resources (NYSE:CLF),and United States Steel Corp (NYSE:X) each finished as the worst performers in the S&P 500 Index (SNPINDEX:^GSPC). The S&P 500, for its part, fell 13 points, or 0.7%, to end at 1,930.
Delta Air Lines ended as the day's biggest decliner, losing 5.4%, as the airline took a hit following the sudden increase in global oil prices. Oil prices spiked, jumping more than 2%, as the unrest in the Middle East caused fears that global supply will dwindle in the chaotic period. The airline industry was badly hit today, which frequently happens when oil prices spike. The airline industry's major input cost is -- you guessed it -- oil, so when energy prices rise, Delta Air Lines' margins will either contract, or they'll pass it on to customers.
Coal and iron ore miner Cliffs Natural Resources shed 4.3% today. Its problems with hedge fund and activist investor Casablanca Capital -- like the fund asking for a complete replacement of the board of directors -- have been well-documented. But that isn't Cliffs Natural Resources' only problem: Analysts are also lowering forecasts for the stock as a sort of new Wall Street ritual. While analyst downgrades can come on somewhat of a whim, there's a very real concern that the level of $120 per ton the company is using in its 2014 iron ore projections is the result of debt covenants, and not based upon reality.
Finally, shares of United States Steel fell 3.8% on Thursday. America's largest steel producer has felt the wrath of Wall Street in recent weeks in the aftermath of the highly publicized U.S.-China cyberwar. The U.S. formally charged five Chinese military officials with cyber espionage last month, with the Justice Department naming six U.S. companies that the Chinese allegedly stole trade secrets from. U.S. Steel was one of the unfortunate victims and, with investors uncertain about the extent of the security breach and the utility of the compromised information unknown, shareholders are seeing a healthy dollop of risk, and very little reward on the horizon.