Stocks of beleaguered tourism companies rose sharply Monday after drug maker Pfizer’s announcement that its coronavirus vaccine was 90% effective in early trials.
The gains for airlines, hotels and cruise lines occurred amid a broader stock market rally reflecting investors’ hopes that a vaccine could soon return economic life back to normal in the United States and beyond.
“People are buying those because they see a light at the end of the tunnel,” said Todd Morgan, chairman at Bel Air Investment Advisors.
Arguably, no industry has more riding on stopping the pandemic than the cruise industry, particularly in South Florida, home to two of the world’s busiest seaports and headquarters of the three largest cruise lines.
Carnival Cruise Line shares closed up 39.3%, to $19.25, on the vaccine news. Royal Caribbean rose 28.8%, to $75.43, and Norwegian gained 26.8%, closing at $21.51. All have announced that cruises, suspended since March, won’t resume in 2020.
Last week, the Centers for Disease Control and Prevention announced that cruising from U.S. ports could resume after the cruise lines certify that they can keep crew members and passengers safe. Resumptions of cruise voyages are expected to occur gradually sometime next year.
Hotel stocks rallied with Wyndham Destinations up 16.3%, to $42.86. Hyatt Hotels Corp. was up 19.8%, to $67.53, and Marriott International rose 13.9%, to $118.30.
Airlines were buoyed as well. Fort Lauderdale-based Spirit Airlines rose 20.5%, to $21.31; Delta jumped 17%, to $36.77; and Jet Blue closed 21.7% higher, at $15.03.
Theme park stocks were up sharply too, triggered by confidence that a vaccine will lift the floodgates on families itching to book vacations in the Orlando area.
Disney was up 11.8%, closing at $142.59. SeaWorld Entertainment closed up 13.7%, at $27.05, and Comcast, parent of the Universal’s parks, was up 5.95%, closing at $47.18.
The Dow Jones Industrial Average gained 834.57 points, closing up 3%, at 29,157.97.
Tourism companies have been devastated by government-imposed shutdowns, consumers’ decisions to avoid crowds and the economic fallout of the pandemic.
Airlines, cruise lines, hotel companies and theme parks have laid off tens of thousands of jobs since spring.
If a coronavirus vaccine does indeed pan out, analysts say it’s a “game changer” and just what the market had been waiting for. It underscores again how the coronavirus and its effect on the economy are the dominant concerns for investors, much more than who wins what in Washington.
The 90% effectiveness rate for Pfizer’s potential vaccine is what struck Ajay Rajadhyaksha, head of macro research at Barclays.
“If that proves to be correct, it is a significant positive surprise and increases the odds of a quicker return to normalcy,” he said.
Information from the Associated Press was used in this report.
©2020 Sun Sentinel (Fort Lauderdale, Fla.)