Thursday morning was volatile for the Dow Jones Industrial Average (DJINDICES:^DJI) as investors grappled with surges in COVID-19 cases in many states across the country. Texas Governor Greg Abbott announced that he was pausing further phases of re-opening Texas due to rapidly rising cases. Abbott is also banning elective surgeries in Bexar, Dallas, Harris, and Travis counties. The prospect of new stay-at-home orders in some areas is becoming increasingly likely.
The Dow was up about 0.25% at 12:25 p.m. EDT despite the developments. Disney (NYSE:DIS) stock moved in the opposite direction after the company delayed the re-opening of Disneyland, while Apple (NASDAQ:AAPL) stock rose with the market even as the company re-closes some of its retail stores.
Disney delays Disneyland re-opening
Disney's parks are a critical source of revenue and profits. In fiscal 2019, the parks, experiences, and products segment produced $26.2 billion of revenue and $6.8 billion of operating income. It was the largest segment by revenue and the second largest segment by profit.
Disney was forced to close its U.S. parks in March as the novel coronavirus pandemic led to stay-at-home orders across the country. The company was planning on re-opening parks in July, but the surge in cases in recent weeks has thrown a wrench in those plans.
On Wednesday, Disney announced that it was delaying the re-opening of California's Disneyland until further notice. The State of California has said that it won't issue guidelines on re-opening theme parks until after July 4, too late to ensure a safe re-opening on July 17 as originally planned. Disney will provide another update on re-opening once it has a better idea of when guidelines will be released.
Florida's Disney World is still on track to begin re-opening on July 11, but Disney may be forced to delay that re-opening as well, given the rapid spread of the virus in Florida. Florida has experienced a surge in confirmed cases since the beginning of the month, the result of the relaxing of measures that had kept the virus in check. The States of New York, New Jersey, and Connecticut are now requiring anyone traveling from Florida or other hotspot states to self-quarantine for 14 days.
Disney stock was down about 1.8% by early Thursday afternoon. Shares have rallied since bottoming out in March, but a return to those lows is possible if Disney is unable to open its parks in the near future.
Apple closes more stores
Apple has been re-opening its retail stores in the U.S., but a surge in virus activity has led the tech giant to re-close some stores. Apple shut down some stores in Florida, North Carolina, South Carolina, and Arizona last week, and the company is now doing the same in Houston, Texas locations. That brings the total number of stores re-closed to 18, according to CNBC.
Apple products can be bought at plenty of other stores and online, but Apple's stores play an important role for both customer service and brand building. In locations where Apple's stores have been re-closed, consumers may be less likely to upgrade their devices. An iPhone upgrade is easily delayed for most iPhone users.
Even without a renewed surge in virus cases, Apple was going to have a tough time later this year selling consumers on pricey new iPhones, given the state of the U.S. economy. Now with Apple forced to close some stores due to the virus, consumer appetite for new iPhones may be depressed further. Apple stock was up 0.9% despite the store-closing news.