(Bloomberg) -- If a coronavirus-driven recession scares consumers away from car dealerships, they'll have to turn to the likes of AutoZone Inc., O'Reilly Automotive Inc. and Advance Auto Parts Inc. to keep their old beaters running.
At least that's the bet investors are making Monday. The retailers of replacement parts were three of only nine stocks in the S&P 500 trading higher as of 2:30 p.m. New York time.
“The market is reading this as, no one will be buying new cars for a while,” said Kevin Tynan, a senior analyst with Bloomberg Intelligence. “If consumers are retrenching, they will keep their cars longer. There is a natural resilience to these companies.”
AutoZone shares rose as much as 4.5%, while O'Reilly and Advance Auto advanced as much as 3.1% and 1.9%, respectively.
Carmakers, on the other hand, are getting crushed out of concern that Covid-19 becomes a significant threat to demand across the globe. Countries are now taking or considering severe measures to contain the virus similar to those in China, where auto sales plummeted a record 80% last month.
The 26-member Bloomberg World Auto Manufacturers Index plunged as much as 6.6% on Monday, its biggest intraday drop since December 2012. General Motors Co. shares fell as much as 16% and are on course for their biggest decline since the company's November 2010 initial public offering.
Read more: Ford Breaches $6 on Doubts of Downturn Readiness
--With assistance from Cécile Daurat.
To contact the reporter on this story: David Welch in Southfield at dwelch12@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Melinda Grenier
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