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Swine flu and the stock market

(For the lastest news regarding swine flu and the stock market, please scroll down to the news feed).

During the panic about Asian bird flu in 2005 and 2006, airline, hotel groups, insurers, and oil companies stocks fell heavily, while shares in drug, healthcare, and cleaning product businesses soared.

There’s still uncertainty around the swine flu situation. Uncertainty however has proven to be a big stock market mover in the past year. Further, even the slightest new information about such a potentially explosive issue could have a significant effect on the markets. Here are some possibilities in the short term.

Sectors That Could Be Hit Hard

* Transportation sector: Travel advisories and recommendations to stay home won’t help transportation stocks; ETFs like IYT.
* Reduce travel and visits to retailers, movie theaters, restaurants, and other public places.
* With recessionary pressures causing people to cut down on luxuries and discretionary spending, the travel industry is in an especially vulnerable position.
* An additional pullback from a flu scare will have a significant impact on cruise line stocks more than hotel companies, according to Zacks Research analyst Sean P. Smith, who thinks those in the worst position include Carnival and Royal Caribbean (which both have close quarters and itineraries including ports in Mexico.)
* Energy: Fewer people flying and traveling in general could cause weaker overall demand for energy and crude oil funds; ETFs like USO.
* Equities in general: As we’ve seen in the past six months, a little bit of uncertainty can go a long way towards causing equities to tank; ETFs that index equities such as SPY and VTI.

Sectors That Could Get a Lift

* Pharma and Healthcare sectors: In anticipation of demand for vaccines and health services, shares of pharmaceutical and healthcare companies could appreciate; ETFs like IRY and IHE.
* Gold and Commodities: In the last year precious metal ETFs have been popular buys on days when panic seemed to set in; ETFs like GLD and SLV.
* Treasuries: Similarly, a flight to safety away from equities could make for inflows in bond funds thought to be very secure; ETFs like IEF and TIP.
* Industries that could benefit include those that deal in home entertainment,

If the current swine flu epidemic ends up infecting millions of people, then global GDP could be adversely affected at a time when the global economy is already in its worst recession in decades. If, however, the current epidemic ends up being about as virulent as the SARS outbreak of 2003, then Mexico will likely suffer a short-term economic setback but the overall effect on global GDP is likely to be rather small.

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swine flu stock market - Google News
Tue, 09 Mar 2010 13:45:05 GMT+00:00

Cantel Medical 2Q Profit Up 29% On Higher Margin Sales
Wall Street Journal
Lately, swine-flu worries fueled sales of disinfectants and face masks, but swine-flu fears have abated in recent months as vaccines become broadly ...

and more »
Mon, 01 Mar 2010 05:06:16 GMT+00:00

Stocks tend to take sovreign debt crises in stride
MarketWatch
Unfortunately, Swine Flu has already been used. But what interests me more about the historical parallels is how sanguine the stock market was in 1997 in ...

and more »
Thu, 11 Feb 2010 03:15:23 GMT+00:00

Sanofi's Profit Rises on Vaccine Sales
New York Times
Sales of more than 100 million doses of swine flu vaccine spurred higher fourth-quarter revenue and profit for the French drug giant ...

and more »
Thu, 04 Mar 2010 14:36:39 GMT+00:00

BioSante Pharmaceuticals to Raise $18 Million in Registered Direct Offering
MarketWatch (press release)
Each unit, consisting of one share of common stock and a warrant to purchase 0.5 of a share of common stock, will be sold for a purchase price of $1.73, ...

and more »
Wed, 03 Mar 2010 11:30:30 GMT+00:00

World News

Panacea Biotec develops Swine flu vaccine
domain-B
Panacea Biotec Ltd has developed `Pandyflu', the first indigenous vaccine against the H1N1 virus (Swine flu). Panacea said it has used the egg-based ...
Panacea Biotec to meet Swine flu vaccination demandEquity Bulls

all 10 news articles »
Tue, 09 Mar 2010 19:41:49 GMT+00:00

A Big Upgrade for SciClone Pharmaceuticals
Motley Fool
The company is also looking to apply the drug to other diseases, like enhancing the response of a Novartis (NYSE: NVS) swine flu vaccine and treating ...

and more »
Mon, 08 Mar 2010 09:06:46 GMT+00:00

Taiwan Health Minister tenders resignation over health insurance increase
eTaiwan News
... ranging from its handling of melamine-tainted milk powder from China, the A (H1N1) swine flu virus and the import of beef products from the United States.

and more »
Thu, 11 Feb 2010 21:41:49 GMT+00:00

Secrets of the Mexican Wave
The Big Money
And while some investors saw a state on the brink following the outbreak of swine flu and sensationalistic headlines on drug-trafficking violence, ...

and more »
Wed, 17 Feb 2010 07:06:04 GMT+00:00

CSL Profit Beats Estimates on Swine Flu Vaccine Sales
BusinessWeek
CSL had A$160 million in sales of its vaccine for swine flu, or H1N1, during the six months on orders from governments in the US, Australia, Germany, ...
CSL in the pink as vaccine sales rocketThe Australian
Australia's CSL H1 tops forecasts; sticks to outlookReuters
CSL injects expansion plans into its strategySydney Morning Herald
Herald Sun -The Australian -The Australian
all 66 news articles »
Thu, 25 Feb 2010 00:58:10 GMT+00:00

CDC advisory panel says virtually everyone should get a seasonal flu shot
Los Angeles Times (blog)
The CDC has recommended that the swine flu virus be included as one of the three components in next year's seasonal flu vaccine. ...

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