The stock market has been extremely optimistic about the prospects for a quick end to the COVID-19 pandemic, and nearly every sign of potential success in moving forward with greater prevention or evaluation of the disease gets a favorable reception from market participants. That was definitely the case on Thursday morning, and helpful comments from the Federal Reserve also helped boost spirits on Wall Street. Shortly before 11 a.m. EDT, the Dow Jones Industrial Average (^DJI 0.00%) was up 265 points to 28,597. The S&P 500 (^GSPC -0.07%) picked up 18 points to 3,497, and the Nasdaq Composite (^IXIC 0.00%) gained 32 points to 11,697.
The Fed's announcement that it will be willing to accept slightly higher inflation rates gave investors more confidence that the central bank won't do anything to pull away accommodative monetary policy measures anytime soon. Meanwhile, news of a $5 COVID-19 test from Abbott Laboratories (ABT 0.20%) helped boost not only the healthcare company's stock but also shares of travel companies that are relying on a permanent coronavirus solution sooner rather than later.
Testing in progress
Shares of Abbott Labs were higher by 7% Thursday morning. The company got good news from regulators in its efforts to combat the impacts of the coronavirus crisis.
Abbott has developed a COVID-19 test that is inexpensive and fast. The BinaxNOW COVID-19 Ag Card test generates results in just 15 minutes. It also comes with an attractive price tag of $5 per sample to evaluate.
This morning, Abbott found out that the U.S. Food and Drug Administration had given it emergency use authorization to make its tests available for use. That's great news for medical professionals in the field, because the test doesn't take sophisticated equipment in order to evaluate the results.
With error rates in the 1.5% to 2.9% range, BinaxNOW won't solve all of the problems caused by uncertainty about COVID-19 exposure and transmission. Nevertheless, the cost-effective measure will be a valuable asset in an environment in which reliable testing has been hard to come by.
Airlines ascend, cruise stocks set sail
The travel industry in particular stands to benefit from quick testing, as it would help companies evaluate passenger health in ways that would be practical even under normal operating conditions. That sent shares of United Airlines Holdings (UAL -0.05%) up more than 6% early Thursday, and other airlines also saw solid gains.
Meanwhile, cruise ship operators saw even more significant gains in their stocks. Norwegian Cruise Line Holdings (NCLH 1.48%) picked up nearly 8%, with peers seeing only slightly more modest advances.
Requiring a 15-minute test before setting sail would be a small price to pay for cruise ship passengers embarking on a weeklong voyage, but it would put both ship personnel and travelers much more at ease about their health and safety. It's less clear whether incorporating a COVID-19 test into the TSA screening process at airports or the aircraft boarding process at gates would be quite as manageable. Having the tests available, though, opens up options that airlines and cruise operators haven't been able to consider before.
Not knowing how long the COVID-19 pandemic will last has been a big burden on airline stocks and cruise operators. If companies can take advantage of medical advances to incorporate into their own safety protocols, it could help them turn the corner from the worst of the coronavirus crisis more quickly.