Broad U.S. equity indices turned positive in afternoon trading Tuesday, rebounding from earlier losses in response to the attacks in Brussels, Belgium. However, tourism sectors and related exchange traded funds weren’t able to rally with the broader market as traders digested the long-term implications from heightened terror activity.
The the SPDR S&P 500 ETF (NYSEArca: SPY) was up 0.1% in afternoon Tuesday trading as the S&P 500 Index rose 2.2 points, or 0.1%, to 2,053.8, recovering from an earlier dip in the session.
Financial markets have been reacting swiftly to attacks in Western cities before quickly recovering, reports Riva Gold and Leslie Josephs for the Wall Street Journal.
The market “has largely grown numb to them and shrugged them off,” Keith Bliss, senior vice president at brokerage Cuttone & Co., told the WSJ “Unless we see another attack on the heels of this or another attack in a major metropolitan center…I don’t think the market’s going to react.”
Meanwhile, travel and tourism-related areas remain depressed after explosions hit Brussels’ international airport and subway station. On Tuesday, the broad iShares Transportation Average ETF (NYSEArca: IYT) was 0.6% lower and SPDR S&P Transportation ETF (NYSEArca: XTN) was down 0.4%. IYT includes a 22.7% tilt toward airlines. The U.S. Global Jets ETF (NYSEArca: JETS), the only dedicated global airline industry-related ETF on the market, dipped 0.7% Tuesday on over four times its average daily volume.
[related_stories]Additionally, traders weighed on the leisure and entertainment industry through the PowerShares Dynamic Leisure and Entertainment Portfolio (NYSEArca: PEJ), which dropped 0.3% Tuesday. PEJ includes a range of resorts, hotels, airlines and cruise ship companies. Similarly, the Market Vectors Gaming ETF (NYSEArca: BJK), which follows casinos and casino hotels, fell 0.9%.
Traders are growing uncertain over the outlook of the travel and tourism industry after Brussels explosions killed dozens in what authorities called a terrorist attack.
“It’s hard to say what the long-term impact is, but it’s not good,” Sanjiv Shah, chief investment officer at Sun Global Investments, told the WSJ. “There are worries about security, the impact on growth, greater restrictions on travel. It’s just more uncertainty.”