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Why Carnival's Stock Dropped Early Today

By Travis Hoium – Dec 29, 2021 at 2:13PM

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The CDC is looking at as many as 86 omicron outbreaks on cruise ships, which has investors worried.

What happened 

Shares of cruise line stock Carnival (CCL -1.43%) fell as much as 3% in early trading on Wednesday as the Centers for Disease Control and Prevention (CDC) began monitoring more ships. The drop didn't last long, though, and shares were down just 0.5% at 1:30 p.m. ET today. 

So what 

The CDC said on Tuesday that it's investigating or observing at least 86 cruise ships as the omicron variant surges around the world. Ships are investigated if at least 0.1% of passengers test positive for COVID-19, which would be five passengers on a 5,000-passenger ship.

A cruise ship off a tropical island.

Image source: Getty Images.

Few industries have been hurt by the pandemic as much as the cruise industry, so any shutdowns or reductions in service would be bad news. But the CDC's reduction in quarantine guidance and lack of lockdowns already would indicate that the cruise industry will push through this current challenge. That's likely why the stock recovered after early reports were processed. 

Now what 

The continued threat of omicron outbreaks is worth keeping an eye on, but doesn't seem to be a huge risk to the cruise industry today. Business is getting back to normal, and more ships are returning to the water as well. Long term, this business is recovering, and while I don't think it's a great investment opportunity, I see no reason to panic-sell cruise line stocks today. 

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

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