Gaming and airline stocks fell today amid a broad market decline tied to the U.S. debt downgrade and recessionary fears.
Just after 8 a.m. Las Vegas time, the Dow Jones Industrial Average was down 2.17 percent, with stocks sensitive to consumer sentiment – like gaming stocks – particularly hard hit.
MGM Resorts International stock was off 6 percent at $11.90, Las Vegas Sands Corp. was down more than 6 percent at $39.20, Wynn Resorts fell 5 percent to $132.94 and Boyd Gaming Corp. was down more than 8 percent at $6.36.
Two of the larger casino operators in Las Vegas, Caesars Entertainment Corp. and Station Casinos LLC, don’t have publicly traded stock.
The stocks of two important airline operators in Las Vegas, Allegiant Travel Co. and Southwest Airlines Co., also fell, 3 percent and 2 percent, respectively.
Even before Standard & Poor’s cut the federal debt rating by a notch on Friday, consumer confidence was declining and that’s bad news for gaming and other stocks tied to discretionary spending.
That’s because consumers are less likely to book vacations to Las Vegas and other leisure destinations if they see their 401(k) accounts declining and are worried they may be laid off.
Bloomberg last week reported its Consumer Comfort Index – based on phone surveys with consumers – fell to its lowest level in May as consumers were worried about jobs, the declining stock market and political fighting over the U.S. debt ceiling.