Carnival, Royal Caribbean shares skyrocket as potential for COVID-19 vaccine spark record rallies

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Shares of Carnival Corp. and Royal Caribbean Group powered up toward record rallies Monday on heavy volume, on hopes of a quick recovery in the cruise industry following positive news on a potential COVID-19 vaccine.

Carnival’s stock
soared 35.3% in afternoon trading toward the highest close since June 17. That would be the biggest one-day gain since the cruise operator went public in July 1987.

The next biggest gain was the 20.3% rally on April 6, 2020, which was two sessions after the stock hit a 27-year low.

Trading volume bulged to 160.4 million shares, compared with the full-day average of about 34.0 million shares.

The rally comes after Pfizer Inc.
and BioNTech SE
said their COVID-19 vaccine candidate, BNT162b2, was found to be 90% effective in the first interim analysis from Phase 3 study. That sparked a big rally in the broader stock market, as the Dow Jones Industrial Average
charged 1,253 points, or 4.4%, higher.

“Most of our recent investor conversations suggested the market would have been accepting of effectiveness of 60%-70%, thus this result of [greater than] 90% appears to be far ahead of baseline expectations,” said Barclays analyst Carter Gould.

Royal Caribbean shares
bulled 28.0% higher toward the highest close since June 8. That would be the biggest one-day gain since they started trading in April 1993.

The next biggest gain was the 24.7% run up on Oct. 13, 2008, in the midst of the financial crisis. Trading volume of 23.0 million shares was more than triple the full-day average of about 7.4 million shares.

Elsewhere, Norwegian Cruise Line Holdings Ltd.’s stock
hiked up 27.1%, toward the highest close since June 9. That would be the second-biggest one-day gain since going public in January 2013. The record rally was the 42.2% gain on March 24, 2020, which came in the wake of the stock’s record-low close of $7.77 on March 18.

Cruise operators have been among the companies hurt the most by the COVID-19 pandemic, as they have struggled to resume operations amid government restrictions in the U.S. and abroad. With that in mind, a potential vaccine, especially one that is more effective than previously expected, could be a game changer for the cruise industry.

Even with Monday’s rally, shares of Carnival are down 63.2% year to date, Royal Caribbean are down 43.9% and Norwegian Cruise are lower by 63.1%. In comparison, the S&P 500 index
has rallied 11.6% this year.

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