Travel stocks tanked as an outbreak of the deadly new coronavirus spread from China to the United States.
The World Health Organization was trying to determine on Wednesday whether the fast-spreading strain that killed nine people and sickened about 470 in China constitutes a global emergency.
The Centers for Disease Control and Prevention on Tuesday reported the first U.S. case of the mysterious virus, which many have likened to the 2003 outbreak of severe acute respiratory syndrome, or SARS.
U.S. stocks broadly fell on Tuesday from their record levels in response to the developments. Chinese securities also sank as investors grew concerned that the country’s Lunar New Year holiday, which begins Saturday, could worsen the spread as millions of Chinese nationals travel domestically and abroad.
Stocks in travel-based industries, including those of online booking facilitators Booking Holdings, Expedia and TripAdvisor, hotel operators Wynn Resorts, Hyatt and Hilton Worldwide, cruise line giants Royal Caribbean, Norwegian and Carnival, and airlines Delta, United and American, felt the brunt of the pain in Tuesday’s trading session.
Based on the historical impact of illness outbreaks on U.S. stocks, two market professionals — Ari Wald, head of technical analysis at Oppenheimer, and Nancy Tengler, chief investment strategist at Laffer Tengler Investments — agreed that while now was not the moment for investors to pile into travel plays, the space offered some selective opportunities.