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Why Carnival Corporation shares fell 4.5% on Thursday

What happened

Shares of carnival society (NYSE: CCL) fell 4.5% on Thursday and closed the day down 3.8%. There was no big news about the stock or the cruise industry, but there were heavy clouds on the horizon.

So what

The market reacted harshly when Russia appeared to increase its presence in Ukraine. US officials have even accused the country of preparing a pretext for an invasion. Regardless of the reality of the situation, the market does not like uncertainty in Eastern Europe at the moment.

Image source: Getty Images.

Two factors are harming the Carnival today. The first is that the fall in the market has hurt equities overall, with the S&P500 down 2.1% and the Nasdaq Composite down 2.9%. But if a conflict breaks out, it could reduce demand for cruises to parts of the world that are less safe than they used to be.

Now what

Carnival shares have fallen sharply, but if you put it in the context of the broader market, I don’t think there’s much to worry about. Shares of a volatile stock like this often amplify the move in the market, and that’s what we’re seeing today.

As for the potential conflict with Russia, there are a lot of unknowns the market is grappling with, and it’s an uncertainty that investors don’t like. Until we get clarity on what is happening in Russia and Ukraine, expect volatility to continue.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.

Margarita W. Wilson

The author Margarita W. Wilson