The Coronavirus pandemic is negatively affecting all types of businesses. But there are two industries that are facing the brunt of the negative effects. Due to lockdowns around the world, the travel and hospitality industries have completely tanked. Since people can not leave their houses, they definitely can not go on trips to different cities. Due to this, even transportation is taking a big hit.
These negative effects are leading to a major loss in revenue for large companies such as Delta Airlines and Marriott International. Such companies are barely sustaining themselves right now, and their revenues are constantly falling. This is also showing in the stock market. The stocks for travel, transportation, and hospitality companies have taken the largest hit. This is because investors are confident if any of these companies will be profitable for a long time.
Delta Airlines Stock Rises
On Monday, 18 May 2020, Delta Airlines saw a decent rise in its stock price after months. The stock opened at 20.91 USD. It continued to rise during the day and closed at a price of 21.86 USD. This is a rise of 2.66 USD or 13.85% compared to the previous closing price of 19.20 USD.
Hotel Chains, Other Airlines’ Stocks Also Rise
Delta was not the only that saw its stock price rise on 18 May. Marriott International closed the day at a price of 93.62 USD after opening at 85.06 USD. This was a rise of 13.86 USD or 17.38% over the previous closing price of 79.76 USD. American Airlines closed 0.83 USD or 9.18% over the previous closing price of 9.04 USD. The closing price on Monday, 18 May was 9.87 USD.
Moreover, Hilton Worldwide also saw a rise in its stock price. The global hotel giant closed at a price of 73.07 USD after opening the day at 72.08 USD. The stock rose by 4.53 USD or 6.62% over the previous closing price of 68.54 USD. This was one of the few days where both industries saw a rise in the market since the pandemic began.
Why Did The Stocks Rise?
The stock prices of all these companies rose primarily based on optimism from investors. Investors showed great optimism on Monday after there was news of economies opening around the world. Hopes of economic recovery spurred optimism. Another reason why the stock rose is on the heels of an overall rise in the stock market due to a positive update from Modera about a vaccine. The optimism, however, will go away soon and the companies are likely to return to the trend of the last few months.