Lockdown Winners Fade as Reopen Trade Roars After Covid Data

Investors cashed out of companies that benefited from virus-induced lockdowns after promisingresults for a Covid-19 vaccine developed by Pfizer Inc. and BioNTech SE reawakened hopes that a return to normal is on the horizon.

Zoom Video Communications Inc. plunged 16% in early trading, whilePeloton Interactive Inc. slumped 13% andNetflix Inc. was down 5% as investors piled into risk assets and dumped shares of firms that have been winners during global lockdowns. Futures contracts on the Nasdaq reversed earlier gains and fluctuated.

“The rotation that the market is doing is beyond any imagination with Nasdaq in negative territory and Russell 2000 in limit up,” said Alberto Tocchio, a portfolio manager at Kairos Partners. “We will continue to see some rotation out of “winners” into the laggards.”

The preliminary results, which Pfizer’s chief executive called the most significant medical advance in the last century, dealt a blow to some of the lockdowns’ biggest winners as a push to reopen would mean less time on video chats and working out from home. Those expectations in turn lead to a roaring boom for companies that operate things like cruises, concerts, and hotels.

Winners to losers

Zoom Video Communications Inc. andPeloton Interactive Inc. — both stocks and companies that have become household names because of the virus — were among the market’s top decliners, as investors sold out of firms that have seen the largest surge in demand as consumers were forced home. Other companies that cater to online consumers likeWayfair Inc. andEtsy Inc. tumbled on the news. The pair each fell more than 10% while Pinterest Inc. sank 6.9%.

Netflix Inc. dropped 5% andAmazon.com Inc. tumbled 3.1% as the Nasdaq 100 fluctuated. High-flying companies that make and sell Covid-19 testing kits likeQuidel Corp. crashed as investors weighed what testing would look like if a vaccine is successfully developed and distributed.

Reopen trade roars

Airline stocks and cruiseliners helped lead the S&P 500 higher as investors flocked to companies that had fallen out of favor as global travel and vacations were paused.

Cruise companies including Carnival Corp., Royal Caribbean Cruises Ltd, and Norwegian Cruise Line Holdings Ltd. all surged more than 20% in early trading Monday. American Airlines Group Inc. surged 24%, United Airlines Holdings Inc. jumped 18% and Southwest Airlines Co. and Delta Air Lines, Inc. each rallied more than 10%.

Theme park operators ranging from Comcast Corp andWalt Disney Co. toSix Flags Entertainment Corp andCedar Fair surged. Disney shares boomed 10% while Six Flags and Cedar Point jumped 22% and 18% respectively.

Ride sharing stocks rallied withLyft Inc. surgign 16% andUber Technologies Inc. jumping 7.5%.

— With assistance by Janet Freund, and Ksenia Galouchko

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