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Airline shares jump after steep selloff

Global airline stock rallied Tuesday after the previous session's sharp sell off, with American Airlines leading the sector's gains, jumping more than 11 percent.

JetBlue jumped more than 9 percent while shares of Delta, Southwest and United Airlines gained as much as 7 percent.

Meanwhile, Ryanair Holdings and Alaska Air group gained about 3 percent and 4 percent, respectively.

Delta Airlines
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The NYSE Arca Airline index and the Dow Jones Transportation Average were both down more than 3 percent after slumping recently.

Airline shares have declined, broadly trading below their 200-day moving averages, since the Ebola crisis reached the U.S. in mid-September, but Art Hogan, chief market strategist Wunderlich Securities, said Tuesday's bounce shows that the drop was overblown.

"We saw a selloff related to concerns over travel as it pertains to Ebola, but the long-term fundamentals" for airline stocks haven't changed, Hogan said.

He said the Ebola outbreak stoked, somewhat unsubstantiated, fears that people would travel less in the near future, but "the reality is energy prices will come down in the next soon," which is, fundamentally, a good thing for jet fuel prices.

Travel stocks will "unfortunately be caught up in speculation and daily headlines surrounding Ebola," which will knock confidence in the industry, Hogan said, adding that he doesn't expect it to have a long-term impact.