Airlines, cruise lines fall as Trump diagnosis raises fears of second wave, slower reopening
U.S. President Donald Trump approaches reporters as he departs on campaign travel to Minnesota from the South Lawn at the White House in Washington, September 30, 2020.
Carlos Barria | Reuters
Shares of companies tied closely to the economy reopening declined on Friday as President Donald Trump’s positive Covid-19 diagnosis raised concerns about a second wave.
Shares of United Airlines fell more than 3.5% on Friday. Shares of American Airlines and Delta Airlines lost 3.2% and 2.9%, respectively. Southwest Airlines dropped nearly 3% and Alaska Air Group fell 3.1%.
Cruise operators also weakened Friday morning with Carnival and Norwegian losing 4% each and Royal Caribbean dropping more than 3.5%.
Early on Friday, Trump told Americans that he and first lady Melania Trump have tested positive for coronavirus, sending stock futures lower. In a tweet shortly before 1 a.m. ET, Trump said: “We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!”
Trump’s diagnosis could impact the White House’s stance on the virus and dent hope the economy reopens quickly.
Airline and cruise line stocks hinge on the reopening of the economy. The industries have been hit hard by the Covid-19 pandemic, that forced a nationwide shutdown of the economy and kept millions of Americans in their homes. The major airlines’ stocks are still 50% and 60% from their 52-week highs, while the cruise lines are 50% and 70% off their highs.
Airlines have also been hoping for a second stimulus package, which has been caught in gridlock in Washington. The airline industry is on the verge of laying of thousands of employees if it does not get fiscal support.
Plus, cruise lines were under pressure when the Centers for Disease Control and Prevention on Wednesday extended its ban on passenger cruising from U.S. ports through Oct. 31.
Retailers also fell on Friday. Gap shares fell 3.5%.
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