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Why Travel and Entertainment Stocks Fell Today

What happened

Shares of travel and entertainment stocks were tumbling for the third day in a row on Wednesday as coronavirus fears continued to ripple through the market. Today, the broad market was relatively stable as the SP 500 finished down just 0.4% after falling around 3% on both Monday and Tuesday. However, as the CDC warned Americans to brace themselves for the virus spreading in the U.S., investors punished stocks that would be particularly sensitive to a domestic outbreak, including businesses that depend on shared spaces like the travel, leisure, and tourism industry.

As a result, stocks including Expedia (NASDAQ:EXPE)TripAdvisor (NASDAQ:TRIP)Eldorado Resorts (NASDAQ:ERI), SeaWorld Entertainment (NYSE:SEAS)Six Flags Entertainment (NYSE:SIX), and Dave Buster’s Entertainment (NASDAQ:PLAY) all fell at least 7% today. The last four stocks were down more than 10% at one point while Dave Buster’s closed down 11.2%.

Image source: Getty Images.

So what

The range of the stocks affected above shows that the coronavirus fears are weighing on all corners of the travel and entertainment sector. 

After two days of the virus threat pressuring the broad market, investors now seem to be predicting which companies would be most affected by an outbreak in the U.S., and may be getting ahead of themselves with today’s movements. For example, even stocks like Uber and Lyft fell nearly 5%, a sign investors think the general public may be reluctant to ride in shared vehicles if the outbreak spreads in the U.S. However, stocks like Netflix and Peloton, whose businesses rely on customers staying at home, rose sharply today. That shows investors are already placing bets as if an outbreak in the U.S. is likely.

The travel and entertainment stocks that fell today all do most of their business in the U.S., and of the group, only Expedia and TripAdvisor have

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