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 The market's big losses last week were largely attributed to
concerns over global growth and plummeting oil prices. But fears
that Ebola could spread in the United States after three people in
Dallas were diagnosed with the hemorrhagic fever added more than a
little froth to the market's recent convulsions.
By Monday, however, it was evident that investors were growing more
sanguine over the Ebola threat as 43 people who came into contact
with an Ebola-infected patient in Dallas cleared the 21-day
incubation period for the virus.
"It was a short-term scare," said Howard Simons, president of
Rosewood Trading in Chicago.
Several of the stocks that got hit hardest by the fear - including
airlines and hotels - bounced back sharply on Monday. Just as
notably, several stocks that rode the scare higher, such as hazmat
suit maker Lakeland Industries Inc. and Tekmira Pharmaceuticals
Corp, which is testing a drug to treat the virus, fell by more than
30 percent over the past three sessions after rising over 200
percent.
"Anybody who's buying some sort of panic-related stock paid too much
and that's that," Simons said. "You do stupid things; you lose
money."
Panic over a possible Ebola outbreak in the United States escalated
after a Liberian man became the first person in the United States
diagnosed with the virus on Sept. 30. Two of the nurses caring for
him, Nina Pham and Amber Vinson, also contracted the virus, and
Vinson flew on a commercial flight one day before she was diagnosed.
A cruise ship was denied docking by Belize and Mexico last week
because a Texas hospital lab worker on board might have come in
contact with test samples from the Liberian man, who died on Oct. 8.
The worker has tested negative for the virus.
KEEPING AN EYE ON THE CALENDAR
The relatively long incubation period for the disease is prompting a
focus on the calendar, with early November being seen as a likely
time for an all-clear for the United States as long as no new cases
emerge.
A person can become infected with Ebola up to 21 days after initial
exposure to the virus. About 260 people in Texas and Ohio are still
being monitored.
"Going into the market today, there seemed to be somewhat of an
easing of Ebola tension," said Jack Ablin, chief investment officer
at BMO Private Bank in Chicago.
"While it certainly was a contributor to volatility and concern, we
did have some easing both in Dallas and on the cruise ship. I think
some of those fears have subsided a little bit."
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Shares of Lakeland fell 12 percent on Monday and 37 percent in the
past three sessions, following a 248 percent gain in the
seven-session period to last Monday.
Alpha Pro Tech, which makes disposable protective apparel, fell 47
percent in the past three sessions. In the five sessions to last
Monday, it had gained 219 percent.
Tekmira Pharmaceuticals traded earlier this month almost 240 percent
above the July low of $8.86. On Monday, it lost 14.5 percent to
$18.61.
On the flipside, airliner and cruise ship shares have bounced back.
American Airlines rose as much as 26 percent from a nine-month low
hit last week and the Dow Jones Transportation Average rose nearly 7
percent from a five-month low hit Wednesday.
In a reassuring sign that U.S. hospitals can contain the virus,
Emory University Hospital in Atlanta said late Monday an American
who was flown in from West Africa and treated for Ebola there since
Sept. 9 has been released after being found free of the virus.
The worst Ebola outbreak on record has killed more than 4,500
people, most of them in Liberia, Guinea and Sierra Leone.
As more people with possible exposure end their quarantines anxiety
over Ebola will "fade into the background in a hurry," said Simons
of Rosewood Trading.
"The public has a short memory."
(Additional reporting by Rodrigo Campos; Editing by Lisa Shumaker)
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