Coronavirus Causes Drop in Travel Stocks, Oil Prices

By Paul Riegler on 27 January 2020
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As the death toll from the novel coronavirus climbed and the U.S. Department of State and the U.S. Centers for Disease Control and Prevention issued their highest level warnings against travel to the region, stock prices across the globe tumbled and oil prices fell.

Analysts expect an overall decline in international travel as a result of the virus.  In China, officials there have ordered the suspension of sales of domestic and international tours to avoid the possibility of spreading the disease.

The share price of China Southern Airlines fell 7.01% in Monday trading on the New York Stock Exchange, while China Eastern Airlines fell 7.02%.  Among U.S. carriers that fly to China, American Airlines fell 5.54%, while United Airlines fell 5.21%, both on the Nasdaq.  Delta Air Lines, which trades on the NYSE, fell 3.37%.

Hotel stocks felt less impact. Shares of Marriott, the world’s largest hotel chain, fell 2.14% on the Nasdaq, while Hilton dropped 3.27% and Hyatt fell 0.7%, both on the NYSE.

Meanwhile, oil prices continued to slide on Monday, with Brent dropping well below $60 per barrel, as panic around the coronavirus continued to grow. Brent crude is down $7 over the past week, a steep decline that is “100% due to the coronavirus,” Edward Marshall, a commodities trader at Global Risk Management, told the Wall Street Journal.

The death toll in China from the virus climbed to 80 on Monday as officials said that there were 2,744 confirmed cases of the illness, of which 1,423 were in Hubei. In Wuhan, the city’s mayor said there were approximately 3,000 patients being treated and that he expected half of those to eventually test positive for the coronavirus.

While there have been reported deaths from the coronavirus outside China, there have been 61 cases reported in 14 countries across the globe, with the most in Australia, Macau, Taiwan, and the United States.  No deaths have been reported outside of China, however.

(Photo: Accura Media Group)

Accura News

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