Travel stocks such as shares of airlines, cruise operators, and hotels rose following an FDA announcement on coronavirus treatment and vaccines.
Shares of cruise operators and airlines rose amid encouraging coronavirus news. Among the large number of travel-related stocks that increased on Monday were United Airlines Holdings Inc (NASDAQ: UAL) and Carnival Corp (NYSE: CCL).
On Monday, shares of U.S. airlines, cruise ships, and hotels jumped after the U.S. health authorities announced updates on COVID-19 treatments and vaccines. The announcement was released by the U.S. Food and Drug Administration on the 23rd of August, titled “FDA Issues Emergency Use Authorization [EUA] for Convalescent Plasma as Potential Promising COVID-19 Treatment, Another Achievement in Administration’s Fight Against Pandemic.” According to the FDA, the authorization is one of the government’s efforts to fight the persisting coronavirus pandemic.
Shares of Airlines and Cruise Operators Increase
Following this announcement, United Airlines and Carnival Corp climbed over 8%. Delta Air Lines Inc (NYSE: DAL) also revealed plans to add about 50 international flights for summer in 2020 and 2021.
In addition, American Airlines Group Inc (NASDAQ: AAL) also added some gains. Currently, AAL is at a premarket price of $13.80, more than a 2% increase over its previous close of $13.44. Also, the company’s stock grew 6.67% in the last five days.
Furthermore, an exchange-traded fund (ETF) that monitors the global airline industry, U.S. Global Jets ETF(NYSEARCA: JETS) had a 4.3% increase.
Similarly, shares of Southwest Airlines Co (NYSE: LUV) jumped as a result of the FDA announcement. In the last five days, the company increased over 8% and is presently at a premarket price of $37.32. One of the cruise operators that added gains due to the EUA is Norwegian Cruise Line Holdings Ltd (NYSE: NCLH). The company operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands.
According to a Financial Times report, the Trump administration is considering bypassing the standard U.S. regulatory protocols to fast-track a vaccine developed by AstraZeneca Plc (LON: AZN) and Oxford University. Following this news, AZN also surged.
Shares of Hotels Rise in Response to the EUA News
At the peak of the pandemic, airlines, hotels, and cruise ship sectors were all affected by the health crises. A lot of companies were forced out of business while some cut down on the number of employees, to survive the global economic decline.
Hilton Worldwide Holdings Inc (NYSE: HLT) is one of the hotel chains that suffered from the coronavirus pandemic. In year-to-date performance, the company declined over 20%. However, HLT jumped after the FDA announcement. Records show that the company’s stock grew over 5% in the last five days.
Other hotel-chain stocks that also increased following the news are Marriott International and Hyatt Hotels, The Street reported.
Also, on Monday, the U.S. Environmental Protection Agency granted American Airlines an emergency approval to use a disinfectant on certain surfaces against the coronavirus. According to Reuters, the disinfectant lasts up to a week. Presently, the agency is studying the disinfectant’s effectiveness in places like schools.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
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