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In Memoriam
Ebola is spooking Wall Street
The Ebola epidemic is starting to contaminate sentiment on Wall Street, which is already losing sleep over countless crises.
The arrival of Ebola in the U.S. has coincided with a period of extreme turbulence in the stock market, which has tumbled about 8% from record highs.
The deadly virus is clearly not the only factor behind the market slide, but it's a major unknown that is increasingly weighing on market psychology. That was the case again on Wednesday as the Dow plummeted as much as 370 points and health officials revealed a second health-care worker in Dallas tested positive for Ebola.
Ebola fears are most obvious in the airline sector. Shares of American Airlines Group (AAL) and Delta Air Lines (DAL) fell sharply on Wednesday, hurt by the news that the new Ebola patient flew the day before being diagnosed. Both airlines are down nearly 20% over the past month alone.
"The fear is that people will be afraid to fly," said Jason Weisberg, managing director at Seaport Securities.
Other sectors being caught in the Ebola downdraft include the cruise industry, where Royal Caribbean Cruises (RCL) and Carnival (CCL) have tumbled nearly 20% from their 52-week highs.
Hotel stocks like Hilton Worldwide (HLT) and Starwood Hotels & Resorts Worldwide (HOT) have also been punished by the Ebola concerns.
Extreme fear: The Ebola scare is not having an impact on many businesses at this point. For that to happen, the deadly virus would have to spread much more rapidly in the West. That means earnings -- the fundamental component of stock prices -- aren't being hit.
However, market psychology, which has become increasingly fragile, is clearly being hurt by the Ebola epidemic.
"The stock market is now driven by emotion rather than fundamentals. The former rapidly switches from greed to fear on Ebola news," Ed Yardeni, president of investment advisory Yardeni Research, wrote in a note on Wednesday.
Just check out CNNMoney's Fear & Greed Index. It tumbled to zero for the second time ever earlier this week, indicating "extreme fear." Just a few months ago it was flashing "extreme greed" as stocks cruised to record highs.
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The Ebola epidemic is starting to contaminate sentiment on Wall Street, which is already losing sleep over countless crises.
The arrival of Ebola in the U.S. has coincided with a period of extreme turbulence in the stock market, which has tumbled about 8% from record highs.
The deadly virus is clearly not the only factor behind the market slide, but it's a major unknown that is increasingly weighing on market psychology. That was the case again on Wednesday as the Dow plummeted as much as 370 points and health officials revealed a second health-care worker in Dallas tested positive for Ebola.
Ebola fears are most obvious in the airline sector. Shares of American Airlines Group (AAL) and Delta Air Lines (DAL) fell sharply on Wednesday, hurt by the news that the new Ebola patient flew the day before being diagnosed. Both airlines are down nearly 20% over the past month alone.
"The fear is that people will be afraid to fly," said Jason Weisberg, managing director at Seaport Securities.
Other sectors being caught in the Ebola downdraft include the cruise industry, where Royal Caribbean Cruises (RCL) and Carnival (CCL) have tumbled nearly 20% from their 52-week highs.
Hotel stocks like Hilton Worldwide (HLT) and Starwood Hotels & Resorts Worldwide (HOT) have also been punished by the Ebola concerns.
Extreme fear: The Ebola scare is not having an impact on many businesses at this point. For that to happen, the deadly virus would have to spread much more rapidly in the West. That means earnings -- the fundamental component of stock prices -- aren't being hit.
However, market psychology, which has become increasingly fragile, is clearly being hurt by the Ebola epidemic.
"The stock market is now driven by emotion rather than fundamentals. The former rapidly switches from greed to fear on Ebola news," Ed Yardeni, president of investment advisory Yardeni Research, wrote in a note on Wednesday.
Just check out CNNMoney's Fear & Greed Index. It tumbled to zero for the second time ever earlier this week, indicating "extreme fear." Just a few months ago it was flashing "extreme greed" as stocks cruised to record highs.
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