Nov 9 (Reuters) - Shares of firearms sellers tumbled on
Monday as promising data from a COVID-19 vaccine trial knocked
stay-at-home stocks, and as civil unrest failed to materialize
after Democrat Joe Biden emerged as the winner of last week's
presidential election.
Smith & Wesson Brands and rival Sturm Ruger & Co
fell more than 9%, while Vista Outdoor, which
sells ammunition and a range of sporting goods, fell over 12%.
They were among several so-called stay-at-home stocks
dropping after Pfizer said its experimental vaccine was
more than 90% effective in preventing COVID-19.
Sales of sporting goods, including hunting gear, have
increased this year as consumers spend more time outdoors due to
the coronavirus pandemic.
"If a vaccine that is 90% effective can truly bring COVID to
an end, the return to work and school could subsequently bring
sales in these categories back down to normalized levels," Aegis
Capital analyst Rommel Dionisio said in an email.
Two other big winners this year from consumers spending more
time at home - Peloton Interactive and Zoom Video
Communications - both fell more than 14%, while airlines
and other companies that would benefit from an end to the health
crisis rallied.
An absence of civil unrest following the election may also
be hurting sentiment for gun stocks.
Worries that Joe Biden and his Democratic party would win
the presidency and take control of the Senate from Republicans
sent firearms sales surging in recent months, as did violent
protests in several cities, and fears of new civil unrest
related to Tuesday's presidential election.
But with control of the Senate still undecided, Biden could
struggle to fulfill campaign promises, including banning the
sale of military style rifles.
However, Dionisio predicted that fears of gun control could
still fuel another surge in firearms purchases by consumers
worried they will not be able to buy them in the future.
Smith & Wesson's shares have jumped or dropped at least 6%
in every session since the election, and they are now down 11%
overall since Tuesday.
(Reporting by Noel Randewich
Editing by Mark Heinrich)