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Reopening Trade Wanes as J&J Snafu Lifts Stay-at-Home Stocks

Bailey Lipschultz
·2 min read

(Bloomberg) -- Investors flocked back to stay-at-home companies while selling travel shares after U.S. regulators recommended a pause in the use of Johnson & Johnson’s Covid-19 shot amid concerns about blood clots.

J&J extended its monthly rout, while Pfizer Inc., BioNTech SE and Moderna Inc. rose as traders favored competing firms with vaccines that haven’t been tied to similar safety risks. Cruise operator Royal Caribbean Cruises Ltd. dipped. American Airlines Group Inc. also slid on a wider-than-estimated loss for the first quarter -- a stark reminder of the pain that airlines have experienced during the pandemic.

A Goldman Sachs basket of stay-at-home stocks climbed 1.6% to the highest level since February. Zoom Video Communications Inc. climbed alongside exercise-at-home firm Peloton Interactive Inc. The tech-heavy Nasdaq 100 rallied to a record, outperforming other major equity benchmarks.

The safety concerns could give skeptics another reason to either be hesitant to get a vaccine or wait for other shots to become available.

For Cantor Fitzgerald’s Louise Chen, a potential slowdown could “become a headwind for vaccination efforts since safety issues have always been a concern for some contemplating the vaccine.”

However, U.S. officials said they expect the pause on J&J’s shot to last a matter of days, with the announcement not having a significant impact on vaccination goals.

The J&J news comes at a time when investors had been hopeful about a rotation into cheaper areas of the market that could benefit from a drop in coronavirus cases and a reopening of the economy.

The jitters for travel and leisure stocks weighed on both the S&P 500 Airlines Index and the S&P 500 Hotels, Resorts & Cruise Lines Index. Las Vegas Sands Corp. and MGM Resorts International paced losses in casino and gaming shares.

(Updates prices.)

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