News about successful vaccine trials from New York-based pharmaceutical corporation Pfizer caused the stock market to rally, giving the travel sector cause for celebration as its stocks soared.
Airline and cruise stocks rose Monday, followed by a pull-back on Tuesday after the drugmaker announced that its vaccine was more than 90 percent effective at preventing covid-19 during Phase two trials.
It’s the most hopeful sign yet that one of the many vaccines being developed around the world can effectively keep the deadly virus at bay.
The vaccine news triggered optimism and hope that recovery is within sight for the travel industry — one of the hardest hit during the coronavirus pandemic.
On Monday, Royal Caribbean, Carnival, and Norwegian Cruise Line Holdings all gained more than 30 percent in the rally. On the airline side, United Airlines surged as much as 27 percent, while Delta Air Lines, and American Airlines climbed 23 percent and 26 percent, respectively, at intraday highs, Business Insider reported.
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The travel industry has been hard hit by the pandemic resulting in a record number of layoffs and business lows. “U.S. airlines have so far survived without bankruptcy filings thanks to $50 billion in government support and at least $50 billion more in private fundraising efforts, but every carrier is bleeding millions per day and most have little hope of stemming the bleed before 2021,” Motley Fool reported.
A vaccine could change all of that.
“TripAdvisor has long believed travel will recover with vigor as soon as a vaccine was widely available. Today’s Pfizer news is a welcomed step in the right direction,” TripAdvisor CEO Steve Kaufer told CNBC.
Despite Monday’s rally, travel sector stocks pulled back Tuesday.
Shares of most air carriers pulled back, with American Airlines Co. taking advantage of the previous session’s big run up with a public share offering, MarketWatch reported. U.S. Global Jets dropped 1.1 percent in morning trading, after soaring 16.1 percent on Monday to close at a five-month high.
American’s stock dropped 2.6 percent, as the company followed Monday’s surge by looking to sell 38.5 million shares to the public.
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Shares of Hawaiian Airlines fell 5.7 percent, United Airlines slipped 0.6 percent, Delta Air decreased by 1.1 percent, and Spirit Airlines slipped 0.9 percent. Southwest Airlines, however, gained 0.6 percent and JetBlue Airways upped 0.6 percent, according to MarketWatch.