Dear Readers,
It appeared to be fairly placid waters for stocks on Tuesday following Memorial Day weekend as the S&P 500 closed basically flat with a 0.02% gain. But beneath the surface, there were strong, conflicting undercurrents. There was continued momentum in tech, with the Nasdaq gaining 0.6% to a new closing high. Nvidia, maker of advanced chips for applications including AI, stood out once again by rallying 7.1%. But healthcare stocks were weak, with vaccine-maker Moderna plummeting 8.1%. Merck & Co, Amgen, and Johnson & Johnson fell 2.6%, 1.9%, and 1.8% respectively. All three are components of the 30-stock Dow Jones Industrial Average, helping drag it to a decline of 216 points, or 0.6%. One somewhat surprising sector to break out on Tuesday was cruise operators. Heard Editor Spencer Jakab wrote on Monday that these stocks, which have been poor performers following an initial, post-Covid rally, are due for another look. Apparently some on Wall Street agree. The Wall Street Journal's sister publication Barron's reported on Tuesday that Mizuho Securities upgraded Norwegian Cruise Line Holdings to Buy from Neutral, citing cost cuts and a cheap valuation. Norwegian shares climbed 3.5% on Tuesday, and rival Carnival Corp. gained 3.4%.
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Why Are Cruise Stocks Still Dead in the Water? By Spencer Jakab HOTO: JAVIER ROJAS/ZUMA PRESS This time last year, Carnival was the Nvidia of the seas. The cruise line was the top-performing large company in the U.S. during 2023’s second quarter, with a nearly 70% gain for its shares. Numbers two and three were its competitors Royal Caribbean and Norwegian Cruise Line Holdings. Business has continued to improve, but investor sentiment hasn’t: Shares of both Carnival and Norwegian have taken on water since that rally. That pessimism presents a buying opportunity for stock of all three cruise lines. Read More
In Brief Consumer confidence numbers out Tuesday contained some startling good news, but also some disturbing surprises—especially on inflation, says Aaron Back. The period between Memorial Day and Labor Day typically sees subdued share trading volume and mostly sideways movement in stocks, says Spencer Jakab. Enjoying this newsletter? Get more from WSJ and support our journalism by subscribing today with this special offer.
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