Shares of Carnival Corp. sank more than 4% in early trade on Friday after the company’s stock was downgraded to underweight from equal-weight at Morgan Stanley. August is usually an active month for booking cruises, Morgan Stanley analyst Jamie Rollo wrote in a note to clients, but trends this August were negative. At a panel of U.S. travel agents, they noted booking momentum for the rest of 2016 and 2017 seems to have slowed. “Almost universally, the panel mentioned falling rates, growing promotions and rising agent incentives, which given sluggish volumes likely indicate general demand weakness rather than operators attempting to build a base of business,” Rollo wrote. And for the first time, agents mentioned the Zika virus–there’s been a relatively small outbreak in Miami–as having an impact, but cruise lines have denied the affect. Carnival shares are down nearly 15% in the year to date and down 6% in the last 12 months, underperforming the S&P 500 Index , which is up nearly 7% in the year and up more than 12% over the last 12 months.
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