Stock Market Update

[BRIEFING.COM] The major averages remain a tocuh above session lows. 

Travel-related stocks are under pressure this morning, contributing to a 1.3% decline in the consumer discretionary sector as higher crude oil prices weigh on the group. Cruise lines are among the more pronounced laggards, while Expedia Group (EXPE 262.00, -18.70, -6.66%) and Airbnb (ABNB 154.25, -7.56, -4.67%) are also among the worst-performing S&P 500 components.

Royal Caribbean (RCL 226.90, -7.99, -3.40%) is a particular standout to the downside after agreeing to invest approximately $3 billion for a 50% interest in a new joint venture controlling Sandals and Beaches Resorts, giving the company exposure to 20 all-inclusive Caribbean properties. The transaction values the stake at roughly 10 times forward EBITDA and will be funded with committed debt financing from Morgan Stanley (MS 199.81, -0.37, -0.18%).

While the partnership expands Royal Caribbean beyond cruises and creates opportunities to cross-sell resort stays to its existing customer base, the negative reaction reflects concerns about the sizable purchase price, additional leverage, and the company's expansion outside its core cruise operations.