Home / The Market / : Airline stocks blast off after upbeat news on potential COVID-19 vaccine

: Airline stocks blast off after upbeat news on potential COVID-19 vaccine

ROSEMONT, IL – SEPTEMBER 3: An American Airlines jet is seen in the air preparing to land September 3, 2004 at Chicago’s O’Hare International Airport in Rosemont, Illinois. American Airlines announced December 10, 2004 that they will be raising domestic airfares $ 10 for round-trip and $ 5 for one-way trips due to jet fuel expense. (Photo by Tim Boyle/Getty Images)

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Shares of airline companies blasted off Monday, after upbeat news on a potential COVID-19 vaccine candidate from Pfizer Inc. and BioNTech SE gave investors hope for a quick recovery in business and leisure travel.

The U.S. Global Jets exchange-traded fund JETS, +15.01% shot up 16.7% in morning trading, to the highest prices seen in five months.

The air carrier rally comes amid a big surge in the broader stock market, with the Dow Jones Industrial Average DJIA, +4.31% soaring nearly 1,230 points, or 4.4%, and the S&P 500 index SPX, +3.19% up 3.3%. See Market Snapshot.

American Airlines Group Inc.’s AAL, +14.60% stock was by far the most active among the air carrier group. The stock soared 14.8% in morning trading, to pare earlier gains of as much as 25.7%. Trading volume bulged to 96.0 million shares, compared with the full-day average of about 58.3 million shares.

Among other more-active air carrier shares, United Airlines Holdings Inc. UAL, +16.29% ran up 16.6% and Delta Air Lines Inc. DAL, +13.71% powered up 14.1%, with both stocks headed for the highest closes since June.

Spirit Airlines Inc.’s stock SAVE, +20.83% paced the sector’s gains, by rocketing 27.5% toward a five-month high.

Elsewhere, shares of Southwest Airlines Co. LUV, +14.64% hiked up 16.2%, JetBlue Airways Corp. JBLU, +20.64% rallied 20.6%, Alaska Air Group Inc. ALK, +15.68% climbed 16.0% and Mesa Air Group Inc. MESA, +9.35% rallied 12.3%.

Earlier, Pfizer PFE, +6.40% and BioNTech BNTX, +11.39% said their COVID-19 vaccine candidate BNT162b2 achieved “success” in the first interim analysis from a Phase 3 study, as it was found 90% effective in preventing COVID-19 in trial participants without previous evidence of SARS-CoV-2 infection.

Airlines had been among the hardest hit sectors by the COVID-19 pandemic. Although travel has steadily increased since April, a recent surge in new cases has led to new lockdowns in Europe and raised fears of similar moves in the U.S.

“A coronavirus vaccine is the positive catalyst we were looking for to really kick start an aerospace recovery, and while some of the moves today might fade with profit taking, we think this news is fundamentally a step in the right direction,” analyst Robert Stallard at Vertical Research Partners wrote in a note to clients.

The Jets ETF has gained 24.0% over the past three months, but was still down 34.5% year to date. In comparison, the S&P 500 has tacked on 8.0% the past three months and has advanced 12.1% this year.

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