Uber stock drops 6.8% after it cancels car pools, tech stocks rally

Uber Lyft

  • Uber and Lyft suspended its carpool services in an effort to slow the spread of COVID-19.
  • Shares of Uber closed down 6.8% to $18.91 per share Tuesday.
  • Lyft, which also suspended its carpool service, dropped 2.41% to $18.66 per share.

Shares of Uber closed down 6.8% to $18.91 per share Tuesday, while other tech stocks rebounded, after the company announced it was suspending carpool services due to COVID-19.

Lyft, which also suspended its carpool service, dropped 2.41% to $18.66 per share.

The drops come despite a broader market rally following the White House’s plans to dampen the economic blow from the coronavirus pandemic. The Dowrebounded more than 1,000 points on Tuesday, to close up 5.2%, while the S&P 500 rose 6%. Amazon shares jumped more than 7% after the company announced it was hiring 100,000 workers to help with demand. Netflix also climbed 7%, while Apple traded up 4.4%, even though it announced it will close all U.S. retail stores until further notice. All stores outside China are closed until March 27.

Investors are likely viewing Lyft and Uber more as travel stocks, placing them in one of the segments hardest hit by the coronavirus. Several health and government officials have asked the public to avoid non-essential travel and stay home in a bid to slow the flu-like coronavirus. That’s led to a plunge in shares of Delta and Carnival.

Uber warned March 2 in an annual financial filing that “a pandemic or an outbreak of disease or similar public health concern, such as the recent coronavirus outbreak, or fear of such an event” could post a material risk to its business.

Companies are also shifting work online or suspending operations to slow travel. In the United States, at least 5,702 coronavirus cases have been confirmed and at least 94 people have died, according to Johns Hopkins University.

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