What Happened?
A number of stocks jumped in the afternoon session after investors continued to pile into value-oriented names amid growing valuation concerns.
This shift reflected growing caution over high valuations within the technology and artificial intelligence (AI) spheres. As market participants reassessed risk, they reallocated capital from growth-heavy indices, like the Nasdaq, to companies in areas like industrials and financials, perceived to be more reasonably priced. Contributing to the positive momentum, markets remained hopeful that a prolonged 40-day government shutdown would be over. The U.S. Senate approved a compromise funding package, which was pending a vote in the House. The potential end to the shutdown brought a sense of relief to markets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Toys and Electronics company Funko (NASDAQ:FNKO) jumped 4%. Is now the time to buy Funko? Access our full analysis report here, it’s free for active Edge members.
- Leisure Facilities company Dave & Buster's (NASDAQ:PLAY) jumped 3.5%. Is now the time to buy Dave & Buster's? Access our full analysis report here, it’s free for active Edge members.
- Travel and Vacation Providers company American Airlines (NASDAQ:AAL) jumped 3.9%. Is now the time to buy American Airlines? Access our full analysis report here, it’s free for active Edge members.
- Travel and Vacation Providers company Delta (NYSE:DAL) jumped 4.6%. Is now the time to buy Delta? Access our full analysis report here, it’s free for active Edge members.
- Travel and Vacation Providers company United Airlines (NASDAQ:UAL) jumped 5.2%. Is now the time to buy United Airlines? Access our full analysis report here, it’s free for active Edge members.
Zooming In On United Airlines (UAL)
United Airlines’s shares are very volatile and have had 24 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 5.3% on the news that the company announced several positive developments, including the launch of a new debit rewards card and the resumption of a key flight route, amid a bullish outlook for the travel industry. United Airlines announced a new MileagePlus Debit Rewards Card, which offered cardmembers more ways to earn miles through spending and saving. As part of the launch, the airline provided a limited-time 10,000-mile bonus for new cardmembers who made qualifying purchases.
United Airlines is up 4.8% since the beginning of the year, but at $99.97 per share, it is still trading 9.5% below its 52-week high of $110.52 from January 2025. Investors who bought $1,000 worth of United Airlines’s shares 5 years ago would now be looking at an investment worth $2,713.
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