CNBC's Jim Cramer on Tuesday said potentially deadly diseases such as the newly discovered coronavirus could have a "chilling effect" on various parts of the market.
On top of other market-moving news, reports of the first case of the virus in the United States on Tuesday afternoon helped bring the Dow Jones Industrial Average down more than 150 points and the S&P 500 and Nasdaq Composite down as much as 0.27%. Cramer said the moves could open some opportunities in certain sectors.
"I'm betting the coronavirus will be the kind of exogenous event that lets you buy unrelated stocks at a discount," the "Mad Money" host said, "but it's also a good excuse for people who want a reason to sell, especially since China's not very forthcoming about what's going to happen."
Coronavirus was blamed for six deaths and sickening hundreds of others in China before U.S. public health officials said the virus reached U.S. shores via a traveler from China. Other cases have been reported in Thailand, South Korea, Japan and Taiwan. The disease harks back to the 2003 outbreak of SARS, or severe acute respiratory syndrome.
The virus is "bad news" for travel stocks as the Chinese New Year nears, Cramer said. Delta Air Lines and Southwest Airlines shares dropped 2.7% on the day, while American Airlines and United Airlines were down more than 4%.
"Any company that's banking on a surge in Chinese holiday traffic — and there are many that do — has to be concerned here, so you can expect the analysts who cover, say, the cruise lines will cut numbers," Cramer said.
Hotels, casinos and other retailers tied to the travel industry could also be at risk if foot traffic declines, Cramer added, pointing to the mid-single-digit drops in Las Vegas Sands and Wynn Resorts shares. The host also warned that shares in Estee Lauder, which has duty-free shops in Hong Kong, could tumble beyond the 1% dip from Tuesday. Marriott International also declined almost 4%.
"I mention all of this because the decline from this outbreak should actually be confined to just those stocks and stocks like them," Cramer said. "In other words, if the whole market sells off on the coronavirus tomorrow, that might be your chance to pick up some high-quality stocks into weakness."