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Mixed Tuesday for stocks: Cruise and Travel stocks still in the red

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Tuesday was another mixed day on Wall Street, with market participants once again seeing different levels of potential future gains in various parts of the market.

The Nasdaq Composite (NASDAQINDEX: ^IXIC) moved higher to push into record territory. However, the S&P 500 (SNPINDEX: ^GSPC) fell modestly, and the Dow Jones Industrial Average (DJINDICES: ^DJI) ended with fairly substantial losses on the day.

Different segments of the travel industry saw varying performances on Tuesday. The difficulties faced by airlines are getting more press, but for the cruise industry, the virus has been a perfect storm.

The disappointing sentiment echoed for cruise ship stocks, where the hits were relatively hard.

Norwegian Cruise Line Holdings (NYSE: NCLH) was dealt the biggest blow, falling 7% on the day. But Carnival (NYSE: CCL) suffered a 6% hit, and Royal Caribbean Cruises (NYSE: RCL) finished lower by 3%

Airline stocks also came under pressure. Discounter Spirit Airlines (NYSE: SAVE) fell more than 5%, with American Airlines Group (NASDAQ: AAL) and Hawaiian Holdings (NASDAQ: HA) losing 4%.

Carriers like Delta Air Lines (NYSE: DAL), United Airlines Holdings (NASDAQ: UAL), and JetBlue Airways (NASDAQ: JBLU) weighed in with declines of 2.5% to 3% amidst conflicting reports of another extended air travel ban due to the spread of the new coronavirus strain in the U.K.

Losses in other areas of travel were less painful as online travel giant Booking Holdings (NASDAQ: BKNG) eased lower by less than 1%.

Hotel giants Marriott International (NASDAQ: MAR) and Hilton (NYSE: HLT) were similarly down only by around 1% on the day.

It was anticipated that travel stocks would do well on Tuesday as lawmakers passed a stimulus package that would include $600 checks for most Americans, freeing up some discretionary money for those who’ve avoided the full brunt of the economic impact of the pandemic.

Yet even with slightly more money in their pockets, it’s far from clear just how quickly travelers will return to the seas and the skies.

Industry analysts are equally uncertain. Some believe it could be a decade before cruise operators can expect to get back to their top performance in terms of earnings.

Prior to the pandemic, the cruise industry – which had been doing $150 billion worth of business annually – was expected to carry 32 million passengers in 2020.

That’s all gone now. During the summer, the industry reeled when over 3,000 COVID cases were linked to 123 separate cruise ships, and resulted in 34 deaths. That’ll likely put a lid on margin expansion for years, putting more pressure on cruise companies’ debt-laden balance sheets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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