The Nasdaq Composite (^IXIC -0.09%) has been struggling recently, but on Wednesday, the index at least managed to climb out of negative territory to gain ground. As of 3 p.m. EST, the Nasdaq was still lagging behind other benchmarks, but it was up two-thirds of a percent.
Many tech stocks remained under pressure, which continued to weigh on the Nasdaq and hold it back from matching or surpassing its rival indexes. But a couple of stocks showed which way the tailwinds appear to be blowing right now. Booking Holdings (BKNG 0.86%) and Marriott International (MAR -0.41%) reached all-time highs, and while skeptics might see the moves higher as premature at best, it's clear that investors are just as eager as anyone else to see people start to travel again.
Flying away from the pack
Shares of Booking Holdings were up more than 3% on Wednesday afternoon. The travel website giant is benefiting from optimism among investors that pent-up demand will lead to a huge rush of bookings for hotels, rental cars, and airline reservations in the coming months.
2020 was definitely ugly for Booking Holdings. In the third quarter, which includes the summer months in the Northern Hemisphere that are typically the busiest for the company, revenue plunged by nearly half. It had to slash its marketing costs to the bone in order to eke out a small profit. Even so, many found it remarkable that the company managed to avoid the massive losses that many other players in the industry suffered through.
Now, everyone's looking forward to 2021. As people who've been cooped up at home for a year now get the opportunity to travel as coronavirus vaccine distribution proceeds, Booking Holdings hopes to capture more than its fair share of the resulting business. The bullishness in the stock stems from the expectation that the worst is over for the company and that improving conditions will justify future share-price advances.
We'll see later this afternoon whether optimism about Booking's future is justified by fourth-quarter financial results. With the stock trading at 24 times what its earnings were for 2019 before the pandemic, it's debatable whether Booking Holdings will look like a bargain in hindsight or whether investors are underestimating the risks involved.
Your Marriott awaits
Elsewhere, shares of Marriott picked up 4%. The hotelier has been on an upward track all week after reporting its fourth-quarter financial results and naming a new chief executive officer.
The numbers at Marriott were predictably painful. It reported its first annual loss in more than a decade. Revenue plunged by 50% from year-ago levels.
Yet there were also some positives. The company said it's seeing some special corporate bookings finally come back for 2022 and beyond, and its hotel operators are sticking with payment plans that provide Marriott with much of its revenue. Stock analysts liked what they saw, boosting price targets and in some cases upgrading the hotel stock.
Marriott had to deal with the tragic death of CEO Arne Sorenson just nine days ago, but it was quick to name Tony Capuano to be Sorenson's successor. Investors liked that quick transition, and they're also eager to see people return to Marriott's hotels and start driving revenue back upward again.
The Nasdaq's non-tech stocks play a vital role in showing the state of the broader economy. Investors pushing Marriott and Booking Holdings to all-time highs are certainly expressing their optimism about the stock market. Even so, it'll take some doing for travel companies to live up to high expectations coming out of such a serious crisis.