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The stock market soared Monday after investors learned some very good news about a potential COVID-19 vaccine. But some stocks are faring better than others.
Traders, still digesting the results of the recent U.S. election, woke up to more big news Monday morning: Drug makers Pfizer and BioNTech said the COVID-19 vaccine they recently tested in more than 40,000 subjects had proved 90% effective. Assuming the treatment proves safe, the companies predicted 50 million doses could be available this year — and more than a billion in 2021.
Stock investors — sensing the economy could return to normal as even sooner than hoped — reacted with glee. Shortly after the market opened the Dow surged more 1,200 points, or nearly 4.4%, to 29,563.
Of course, not all companies have struggled as the pandemic upended the way Americans live and spend money. Some had thrived. And as the prospect of a vaccine threw their newfound competitive advantage into question, investors balked. Plenty of shares were down on what, it seems safe to say, is unambiguously good news on the public health front.
Here are some of Monday's biggest stock-market winners ... and losers:
Stock Market Winners
Cruise Ships: Cruise ships always have to be careful to keep passengers healthy. With some of the earliest high-profile COVID-19 outbreaks outside of China taking place on cruise ships, the industry has been forced to essentially shut down in many parts of the world. No surprise then that the industry's investors just breathed a huge sigh of relief. Carnival Corp. surged 37% in early trading, while Royal Caribbean Group jumped 31%
Movie Theaters: Movie theaters represent another leisure industry where patrons traditionally share tightly packed indoor spaces. What's more, even before the pandemic, cinemas were facing a potentially existential threat as more and more Americans consume entertainment at home through streaming services like Netflix. While it remains hard to say what the long-term future holds, on Monday, theaters got a reprieve. Shares of AMC Entertainment jumped 44%; those of Cinemark were up 35%.
Airlines: Despite close indoor confines, air travel itself may have proved less dangerous than many Americans initially feared. Still, worries remain about tourists spreading outbreaks from location to location, and governments are telling citizens to stay home for the upcoming holidays. For the first week of November, Americans took less than half the number of airline flights they did a year ago, according to the TSA. Perhaps investors are seeing the light at the end of the tunnel: Shares of Delta, Southwest, United and American all jumped more than 10% Monday.
Disney: Disney's streaming service, Disney+, has widely been regarded as a success, setting the company up to adapt well in a possible post-theater entertainment world. But its storied theme-park division, which accounts for roughly a third of Disney revenue, has struggled. In September, the company said it planned to cut nearly 30,000 jobs. On Monday, investors bet tourists will be able to return soon: Disney shares rose 9%.
Pfizer and BioNTech: Despite the excitement on Monday, the Pfizer-BioNTech vaccine still has plenty of safety and logistical hurdles to clear. Earlier the companies signed a $2 billion contract with the U.S. government to provide 100 million doses, hopefully ensuring all Americans get the vaccine for free. Given all the variables, it's not yet clear what the profit implications of today's news will be for either company. But, whatever turns out, it's hard to imagine a better PR coup. Shares of Pfizer rose 8.7%. Those of BioNtech were up 9.8%
Stock Market Losers
Exercise bike makers: Stress eating and cabin fever made "the COVID-19" a running joke for putting on a few extra pounds this summer. Many Americans reacted by finding ways to workout at home. Exercise bike makers Nautilus and Peloton stood to benefit. Now the prospect of Americans returning to the gym appears to be giving investors second thoughts: Nautilus stock slumped 23% Monday and Peloton was down 14%.
Netflix: Netflix was a big winner early in the pandemic, adding nearly 16 million paid subscribers in the first quarter as Americans and others settled into the reality of prolonged lock downs. But that growth slowed as time wore on. While Netflix is likely to remain one of the top-performing stocks of the past several years, on Monday, shares were down nearly 5%.
Amazon: Like Netflix, Amazon is another bet on a digital future that seems bound to arrive soon — but perhaps a lot sooner as a result of COVID-19. Last week Amazon reported third-quarter revenue of nearly $100 billion, beating even Wall Street's bullish forecasts, as millions of stuck-at-home Americans order more and more online. On Monday, however, Jeff Bezos' juggernaut hit a speed bump. While the broad market rallied, Amazon was down 3%.
Etsy: Small-business shopping site Etsy became an unlikely beneficiary of America's scramble to acquire PPE (or personal protective equipment) as its crafters began churning out thousands of cloth face masks customers never dreamed they would need. The boom made Etsy the top-performing stock in the S&P 500 earlier this year. On Monday, however, investors wondered how much longer it could last. Shares were down more than 9%.
Zoom: Perhaps no stock came to personify the coronavirus era more than digital conferencing company Zoom. As millions of workers in the U.S. and elsewhere logged on from basements, bedrooms and home offices, the tech company's stock leapt from less than $70 at the start of 2020 to more than $550 in mid-October. On Monday, those same workers contemplated the prospect of returning to the office again — and perhaps found the memory of swivel chairs and Formica desks strangely alluring. Zoom was down more than 12%.