Airline and cruise stocks rally as Pfizer drug progress spurs hope for travel-industry recovery

Travel stocks surged on Monday after Pfizer’s encouraging vaccine update bolstered hope that the coronavirus crisis may soon end.

Royal Caribbean, Carnival, and Norwegian Cruise Line Holdings all surged more than 30% on Monday morning. United Airlines gained as much as 27%. Delta Air Lines and American Airlines rallied 23% and 26%, respectively, at intraday highs.

The soaring travel giants helped major indexes reach all-time highs on Monday. Stocks rallied in early trading after Pfizer announced its experimental coronavirus vaccine was more than 90% effective at preventing COVID-19 in trial participants. The pharmaceutical company now plans to apply for emergency-use authorization that would allow it to more rapidly distribute the drug.

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Economists and strategists alike have repeatedly said that containing the virus is critical to driving a full recovery. With cases surging to record highs in the US, a viable vaccine is increasingly viewed as a silver bullet for ending the pandemic.

The travel industry was among those hit hardest by the virus and related quarantines. Airline and cruise stocks tumbled through March as trips were placed on hold and people avoided unnecessary travel. While airlines have experienced a partial recovery, cruises are still under a “No Sail” order from the Centers for Disease Control.

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While the recently beleaguered sector and broader market swung higher on the vaccine news, stocks that thrived through the nationwide lockdown plummeted. So-called stay-at-home plays including Zoom, DocuSign, and Peloton faced outsized selling as investors bolstered bets on the reopening trade.

The rosy vaccine news also boosted oil prices as traders turned more bullish toward an increase in travel activity. West Texas Intermediate crude oil leaped as much as 11.3%, to $41.33 per barrel, at intraday highs.

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