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Airline stocks, Boeing (BA) and other travel-related businesses exploded on Monday after Pfizer (PFE) announced the positive results of its trial on the Covid-19 vaccine.
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Pfizer and BioNTech (BNTX) said their developmental vaccine protected against 90% of coronavirus infections in a large-scale study. Previous reports from other vaccine manufacturers have shown efficacy rates of only 60% to 70%. Pfizer will have an update on a major safety report in about a week. Assuming this is positive, Pfizer and BioNTech could submit their coronavirus vaccine for emergency FDA approval after the third week of November.
This raises the prospect of millions of doses available by the end of the year, it was thought that it would take several months to vaccinate most Americans.
The Pfizer news comes as the United States has recorded more than 100,000 new cases of Covid-19 in the past five consecutive days, according to data from Johns Hopkins University. As coronavirus cases increase, vaccine news has proven the positive sign Wall Street needs. Travel-related stocks, which were hit the hardest during the pandemic, soared on Monday.
Boeing shares jumped 14% to 179.36 on the stock exchange today. Boeing stock plunged in March and its market capitalization is lower than some of its defense aerospace peers.
But the company has had its own issues unrelated to the Covid-19 pandemic. Aviation officials have grounded the Boeing 737 Max narrow-body plane for more than a year following two fatal crashes. The aerospace giant expects to obtain regulatory clearance for the return to service of the 737 Max by the end of 2020.
Demand for new planes, however, remains weak amid the pandemic. Airlines have postponed orders for the ailing 737 Max and other planes as travel dries up. Boeing recorded less than 800 net orders for the 737 Max this year after customers canceled orders or switched to a different type of aircraft. Boeing also warned earlier about global demand for wide-body aircraft. He expects international travel to pick up slowly after the pandemic.
Airline stocks climb
The positive vaccine news comes as Europe implements a second round of lockdown precautions. Greece entered a three-week lockdown last week. Meanwhile, France and the UK have issued a month-long blockade to slow down business in time for the Christmas holidays. Italy has severe restrictions in place in Milan and other northern cities.
But US airline stocks saw a rise in domestic travel in the last few weeks leading up to the usually busy Thanksgiving holiday.
Delta Airlines (DAL) climbed 17%. American Airlines (AAL) climbed 15% and United Airlines (UAL) jumped 19%.
US airlines are awaiting a second stimulus package from the US government. The situation forced carriers to lay tens of thousands of workers on leave when stimulus funds ran out in September. Democrats and Republicans in Congress were unable to come to an agreement on the size of a new stimulus package before the presidential election.
Reserve hotel stocks
Hotelier Marriott (MAR) and Hilton around the world (HLT) rose 14% and 12%, respectively.
Intercontinental Hotels (IHG) posted a consolidation difference of 11% at 61.09. This just closed above the 61.07 buy point.
Cruise stocks are sailing
Cruise stocks were the first to be affected when Covid-19 reached pandemic status in March. Infections quickly erupted on cruises, forcing passengers to quarantine themselves on ships for weeks.
The Centers for Disease Control and Prevention lifted their no-navigation order at the end of October. The agency said it would let the ships sail under certain conditions. Cruise lines have canceled passenger cruises for the remainder of the year. However, Royal Caribbean is looking for volunteers for mock trips to test new health and safety precautions.
Carnival Corp. (CCL) climbed 39% and Royal Caribbean Cruises (RCL) increased by 29%.
Follow Gillian Rich on Twitter @IBD_GRich for aviation news and more.
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