Fear of Second Covid-19 Wave Sinks Travel and Leisure Stocks
Fear of Second Covid-19 Wave Sinks Travel and Leisure Stocks
(Bloomberg) -- Travel and leisure stocks saw a third straight day of declines as a second wave of coronavirus cases emerged in the U.S. with the number of confirmed cases pushing past two million, according to data from John Hopkins University.
Airline stocks plunged Thursday, including declines of as much as 16% for Delta Air Lines Inc. and 14% for JetBlue Airways Corp. Hotels, cruise operators, online travel agencies and car rental stocks also traded sharply lower, along with restaurants, amusement park operators, casinos and boating stocks. It was essentially a sea of red in discretionary names.
Alaska Air Group Inc. tumbled as much as 15% after the company said the industry will make a slow recovery after the pandemic. President Ben Minicucci said the carrier could shed as many as 3,000 jobs from its work force of 23,000 employees, the Seattle Times reported.
The easing of stay-at-home orders across the global had sparked optimism that life was slowly returning to normal. There have been some industry-specific positive signals, as well, including airlines increasing capacity, amusement park and casinos reopening, and boating demand.
Despite Thursday’s sharp selloff, the S&P Supercomposite Airlines Index has rebounded more than 45% from its May 15 low, while an index of hotel, restaurants, casinos and cruise stocks was up 8.6% for the same period compared to the S&P 500 Index’s gain of about 5.3%.
The second-wave scare is causing investors to seek shelter in stocks that have benefited from Americans staying closer to home. Netflix Inc., Zoom Video Communications Inc. and Peloton Interactive Inc. all traded higher Thursday despite the S&P 500 having its biggest drop since May 1.
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