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Why Carnival, Royal Caribbean, and Norwegian Cruise Line Stocks All Just Jumped

By Rich Smith – Updated Nov 5, 2021 at 9:33AM

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Merck's news is great news for the cruise industry today.

What happened

Tic-tac-toe, three in a row, shares of cruise line stocks Carnival Corporation (CCL -3.83%), Royal Caribbean (RCL -3.71%), and Norwegian Cruise Line Holdings (NCLH -3.05%) all jumped in Friday trading, rising 3.5%, 3.6%, and 4.6%, respectively, through 10:30 a.m. EDT.

And you can thank pharmaceutical giant Merck (MRK -1.15%) for that.

Three colorful arrows racing straight up on a black background

Image source: Getty Images.

So what

This morning, drugmaker Merck announced that its anti-Covid pill molnupiravir has proven effective at cutting the rate of hospitalization and death from Covid by "approximately 50%" in a Phase 3 clinical trial. And that's only the headline revelation. Read a little deeper into the report, and you'll learn that while a few patients involved in the trial were hospitalized, precisely zero patients treated with molnupiravir died over the 29 days of testing.  

Merck stock, by the way, is now up a hefty 9%.

Now what

True, in this trial molnupiravir was given only to "non-hospitalized adult patients with mild-to-moderate COVID-19," but if you are considering these data from the perspective of a potential cruise line customer, here's how things probably look:

If I get on a cruise and suddenly come down with a fever and, taking a test, discover that I've just contracted Covid and am in the early stages of the disease (i.e., still "mild-to-moderate" symptoms), then it sure sounds like Merck has a pill that can stop Covid in its tracks. It might even eliminate the risk of dying from Covid entirely.

Now, do you think that news like that might make you feel a bit more comfortable about signing up to take a "Carnival cruise" -- or a cruise with Royal Caribbean or Norwegian, for that matter? I think it might.

While Merck's pill isn't approved for general consumption yet, the fact that "Merck plans to submit an application for Emergency Use Authorization (EUA) to the U.S. FDA as soon as possible based on these findings" suggests that in the foreseeable future, cruise lines could finally see demand for their services return to something approaching normal once again.  

 

Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Carnival. The Motley Fool has a disclosure policy.

Stocks Mentioned

Carnival & Plc Stock Quote
Carnival & Plc
CCL
$9.31 (-3.83%) $0.37
Merck & Stock Quote
Merck &
MRK
$108.74 (-1.15%) $-1.27
Royal Caribbean Cruises Stock Quote
Royal Caribbean Cruises
RCL
$57.22 (-3.71%) $-2.21
Norwegian Cruise Line Holdings Stock Quote
Norwegian Cruise Line Holdings
NCLH
$15.71 (-3.05%) $0.49

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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