Travel & Leisure ETFs Jump On Vaccine Optimism

The development in the potential coronavirus vaccine has infused strong optimism into the broader markets. This is especially true, as Moderna Inc. (MRNA - Free Report) has inched closer to a vaccine following promising early data.

The data demonstrates that vaccination with mRNA-1273 elicits a robust immune response across all dose levels as it produced neutralizing antibodies in all 45 patients. In the trial, each participant received a 25, 100 or 250 microgram dose, with 15 people in each dose group. Participants received two doses of the potential vaccine. The positive result has pushed the vaccine into the phase 3 trial, which is slated to start on Jul 27. The trial will enroll 30,000 participants across 87 locations, according to ClinicalTrials.gov. Participants in the experimental arm will receive a 100 microgram dose of the potential vaccine on the first day and another dose 29 days later.

Added to the enthusiasm, the Federal Reserve’s Beige Book survey showed that U.S. businesses saw an uptick in activity in the beginning of July as states eased restrictions to contain the novel coronavirus pandemic.

Market Impact

Wall Street saw smooth trading in the Jul 15 trading session with the S&P 500 climbing nearly 1% and Dow Jones gaining 0.5%. While most of the corners were in green, investors rushed to the beaten-down sectors, including cruise lines, airlines, hotel and casino operators, and travel and entertainment-booking companies.

In fact, 20 companies in the S&P 500 gained more than 9% on the day, with a dozen of those in travel, entertainment, and hospitality businesses. The three biggest winners were cruise line companies — Royal Caribbean RCL, Norwegian Cruise Line Holdings NCLH, and Carnival Corp CCL — that gained 16% or more. In the travel industry, Liberty TripAdvisor LTRPA jumped 13.5% while Park Hotels & Resorts PK, TripAdvisor TRIP, and Marriott International MAR gained 12.9%, 9.1%, and 7.9%, respectively. Further, the five airlines in the S&P 500 Index rose at least 7.5% with American Airlines AAL and United Airlines UAL leading the way higher, jumping 16% and 14.6%, respectively.

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