Stay-at-Home Stocks, Covid Testing Firms Rise on Variant Worries
Shares in companies whose businesses got a boost during past Covid-19 flareups rose as a new strain of the virus rattled markets.
(Bloomberg) -- Shares in companies whose businesses got a boost during past Covid-19 flareups rose on Friday as a new strain of the virus rattled markets and spurred fears of fresh social restrictions.
Zoom Video Communications Inc. and home-workout firm Peloton Interactive Inc. both jumped 5.7%, while the broader S&P 500 index tumbled 2.3%, its worst day since February. Streaming company Netflix Inc. rose 1.1% and food delivery firm DoorDash Inc. added 1.6%.
Work-from-home stocks and food delivery companies were among the gainers in Europe, too, with TeamViewer AG rising 3.4% and Delivery Hero SE and Deliveroo Plc both advancing, even as the Stoxx Europe 600 benchmark fell 3.7%.
Covid-19 testing companies gained amid concerns about the new strain, first discovered in southern Africa. Diagnostics firm Teladoc Health Inc. added 3.4% in New York, while Eurofins Scientific SE advanced 7.9% in Paris. Alpha Pro Tech Ltd., a maker of personal protective equipment, jumped 25%. Vaccine makers were also stronger.
Today’s broad market slump “is a logical reaction, people are worried and in the right places, like travel,” said Martin Moeller, co-head of Swiss & global portfolio management at Union Bancaire Privee in Geneva, who noted gains for stay-at-home stocks. “We will learn more over time if it is more contagious or more lethal.”
Sell First, Ask Questions Later: Investors React to New Variant
So-called lockdown winners and Covid-19 testing and treatment firms had already been gaining in recent weeks as European infection rates rose. They had underperformed over the summer as vaccination programs calmed concerns around the pandemic.
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