The stock market had a minor setback on Thursday, with market participants getting increasingly negative as the day progressed. By the close, the Dow Jones Industrial Average and the S&P 500 were both down around 1%, with the Nasdaq Composite managing to see slightly smaller declines.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow Jones Industrial Average (^DJI 0.06%) |
(1.08%) |
(317) |
|
S&P 500 (^GSPC -0.22%) |
(1.00%) |
(36) |
|
Nasdaq Composite (^IXIC -0.52%) |
(0.65%) |
(77) |
Data source: Yahoo! Finance.
Over the past couple of weeks, investors have largely focused on the 2020 presidential election, with anxiety in the run-up to the Nov. 3 election date giving way to euphoria once Election Day was over -- even before anyone had any idea who had won. As important as the election was, it took some of the focus away from the COVID-19 pandemic and its steady worsening in recent weeks. Today, investors started to seem anxious that conditions like those seen in March and April might return -- and take the economy and the stock market down.
It's getting a lot worse again
The latest statistics on COVID-19 are ugly. Roughly 2,000 people died of the disease on Wednesday, the worst day in six months. Case counts in the U.S. are at their highest levels ever, surpassing even the early days of the crisis.
In response, state and local governments are taking action. Face mask mandates are now gaining traction even in some places that have been reluctant to impose such measures, including Utah, Iowa, and Ohio. Large states like California and New York have looked at reversing course on their reopening plans. Restrictions on travel in the Northeast are back in full force and could spread to other parts of the country if the situation doesn't improve quickly.
Image source: Getty Images.
Moreover, with the holiday season upon us, travel raises new threats. Health officials in Canada warn that their Thanksgiving holiday, which happens in mid-October, likely caused a spike in COVID-19 cases as people traveled outside their immediate families to visit loved ones.
Big turbulence for travel stocks
As a result, many of the sectors that had started to see some relief on the announcement of a coronavirus vaccine gave back some of those gains on Thursday. Major airlines were down, with United Airlines Holdings (UAL 5.50%) leading the way with a 4% drop. Southwest Airlines (LUV 0.97%) fell 3%, as it warned that it's seeing its recent boost in revenue decelerate as the end of 2020 approaches.
Cruise ship operators are seeing even larger drops, with Carnival (CCL 0.43%) (CUK 0.63%) suffering the most with its 8% decline. Cruise lines have hoped to navigate a new protocol to get the Centers for Disease Control and Prevention to sign off on their procedures for making their vessels safe from the coronavirus. But now, fears could keep travelers from sailing even if regulators are amenable to the idea of cruise ships leaving port.
Perhaps the biggest realization is that even in a best-case scenario, COVID-19 will be with us for quite a while. Even if a vaccine proves effective, it'll take months to complete development, produce a vaccine in high quantities, distribute it to healthcare providers, and inoculate vast swaths of the population. In the meantime, winter in the Northern Hemisphere could push hospital systems far past their full capacity to handle patients.
Optimism is a good trait for investors to have, but being aware of risks is also important. Right now, there's a huge amount of uncertainty about the pandemic, and anyone who invests in stocks can expect to see big ups and downs for the foreseeable future.
