Shares of Carnival Corporation (CCL 3.82%) fell as much as 4.5% on Thursday and closed the day down 3.8%. There wasn't any big news out about the stock or the cruise line industry, but there were some big clouds on the horizon.
The market reacted harshly to Russia appearing to increase its presence in Ukraine. U.S. officials even accused the country of preparing a pretext for an invasion. Whatever the reality of the situation is, the market doesn't like the uncertainty in eastern Europe right now.
Two factors are hurting Carnival today. One is that the market's drop overall hurt shares, with the S&P 500 falling 2.1% and the Nasdaq Composite falling 2.9%. But if a conflict does break out, it could reduce demand for cruises in parts of the world that are less safe than they previously were.
Carnival's shares moved sharply lower, but when you put it in context with the market overall, I don't think there's a lot to be worried about. Shares in a volatile stock like this will often magnify the market's move, and that's what we're seeing today.
As for the potential conflict with Russia, there are a lot of unknowns that the market is grappling with, and it's uncertainty that investors don't like. Until we get some clarity around what's going on in Russia and Ukraine, expect volatility to continue.