Amid concern that terrorist attacks in London could rattle the economy, local hospitality stocks stumbled and oil company stocks took an early hit, but ultimately perked up.
“The market basically gets spooked very quickly,” said Fadel Gheit, an energy analyst with Oppenheimer & Co. “Initially, people thought the impact would be similar to Sept. 11, (but) this is more like the Madrid bombing. It is not really going to curb economic growth.”
Still, hospitality companies, sensitive to wrinkles in travel patterns, suffered from investor fears that tourism and business travel could slow.
Beverly Hills-based Hilton Hotels Corp., which owns and operates nearly 2,300 hotel properties and timeshares, saw its shares close down 2 cents, or 0.08 percent, to $24.16.
And Hilton was not alone among hospitality industry players suffering from investors’ shaky reaction to the terrorist attacks. Besthesda, Md.-based Marriott International Inc.’s shares slipped 24 cents, or .4 percent, to $68.59, and Starwood Hotels and Resorts Worldwide Inc., based in White Plains, N.Y., settled down 7 cents, or 0.1 percent, to $61.23.
Analysts said that, unless future terrorism incidents put a crimp in travel plans, they don’t expect the London attacks to cause long-term damage to hotel companies.
“I don’t believe today’s events will have any significant impact on travel,” said Will Marks, a hospitality industry analyst with JMP Securities.
Early Thursday, oil company stocks had been off on speculation that the attacks could reduce jet fuel consumption. But stocks rallied later in the day when it appeared the attacks wouldn’t rock the global economy.
“Cooler heads prevailed. The market has shrugged it off,” said Gheit said.
Shares of Occidental Petroleum Corp. based in Los Angeles, rose $1.73, or 2.2 percent, to $81.79, and San Ramon-based Chevron Corp. shares rose 64 cents, or 1.1 percent, to $57.80.
El Segundo-based Unocal Corp., the target of a high profile bidding war between Chevron and CNOOC Ltd., escaped Thursday’s downturn. Its shares were up $1.11, 1.7 percent, to $65.93.
Meanwhile, local security firms Hawthorne-based OSI Systems Inc., which makes X-ray baggage scanners, and South Pasadena-based Cogent Inc., a fingerprint identification systems firm, benefited from speculation that governments would ramp up security investment as a result of the bombings.
Joel Fishbein, an analyst with Janney Montgomery Scott LLC, predicted that Cogent’s “earnings will be increasing as a result of more countries looking to employ more biometric solutions.”
OSI shares jumped 68 cents, or 4.3 percent, to $16.59, while Cogent shares edged up 70 cents, or 2.5 percent, to $29.08.
