Finance News

Airways and cruise traces are falling because the Trump analysis raises fears of a second wave and a slower reopening

U.S. President Donald Trump addresses reporters as he drives from the South Lawn at the White House in Washington to Minnesota on September 30, 2020.

Carlos Barria | Reuters

Stocks of companies closely linked to the reopening of the economy fell on Friday as President Donald Trump's positive diagnosis of Covid-19 raised concerns about a second wave.

United Airlines shares fell more than 3.5% on Friday. American Airlines and Delta Airlines stocks lost 3.2% and 2.9%, respectively. Southwest Airlines fell nearly 3% and Alaska Air Group fell 3.1%.

The cruise lines also weakened on Friday morning. Carnival and Norwegian lost 4% each and Royal Caribbean lost more than 3.5%.

Earlier Friday, Trump announced to Americans that he and First Lady Melania Trump had tested positive for coronavirus and that stock futures had fallen. In a tweet just before 1am, Trump said, "We're going to start our quarantine and recovery process immediately. We'll get through TOGETHER!"

Trump's diagnosis could affect the White House's stance on the virus and hurt hopes that the economy will reopen quickly.

Airlines and cruise ship stocks depend on the economy reopening. The industry was hit hard by the Covid-19 pandemic, which forced a nationwide economy to shut down and kept millions of Americans in their homes. Major airline stocks are still 50% and 60% off their 52-week highs, while cruise lines are 50% and 70% off their highs.

The airlines have also been hoping for a second stimulus package, which stalled in Washington. The aviation industry is on the verge of laying off thousands of employees if it does not receive tax support.

Cruise ships also came under pressure when the Centers for Disease Control and Prevention on Wednesday extended their ban on passenger cruises from U.S. ports until October 31.

Retailers also fell on Friday. Gap stocks fell 3.5%.

Subscribe to CNBC PRO for exclusive insights and analysis as well as live business day programs from around the world.

Related Articles