What happened

The S&P 500 is down 2.75%, and Wednesday looks like it's going to be another down day in this topsy-turvy, coronavirus-tossed stock market of ours.

Cruise stocks in particular are taking it on the chin today, with shares of Royal Caribbean Cruises (RCL -0.66%) down 4.6%, Norwegian Cruise Line Holdings (NCLH -0.88%) off 5%, and Carnival Corporation (CCL 0.67%) sinking 6.3% as of 11:30 a.m. EDT.

3 red arrows going down and crashing through the floor

Image source: Getty Images.

So what

Let's begin with Carnival. On Monday, Carnival Corporation's namesake cruise line, Carnival Cruise Line, announced that in compliance with an extension of the CDC's March 14 "no sail" order, it will cancel all of its cruises through late June, resuming operations no earlier than June 27, 2020.

One day later, additional Carnival subsidiaries, Princess Cruises and Seabourn Cruise Line (and in the evening, Holland America as well) made similar announcements, canceling cruises through June 30, 2020.  

While as of yet, I haven't seen similar announcements out of Royal Caribbean or Norwegian, it's starting to look like the writing is on the wall. With the CDC instructing cruise ships to remain in port until 100 days after its March 14 order (barring new instructions from either the CDC or the Department of Health and Human Services), it looks like all three of these stocks are going to be basically out of commission at least through the end of June.  

Now what

At the same time, though, the affixing of an end date to this "no sail" order -- even one that gets extended from time to time as the situation develops -- keeps hope alive that cruise lines will sail again one day, and that the recession in cruise travel will end as well. Indeed, speaking on CNBC yesterday, Carnival CEO Arnold Donald assured investors that "Social gathering at some point will return, and when it does, people will want to cruise." He also noted that bookings for 2021 are "strong."

The real question investors need to ask is which of these three cruise lines will be able to remain solvent long enough to collect on those bookings, and profit from the industry's revival? Judging from today's price action, investors aren't at all certain that they know the answer to that question.