Tobacco stocks rally as FDA considers banning all flavored e-cigarettes
Tobacco company shares rose in active Wednesday morning trade after the Food and Drug Administration chief said that the agency might ban all flavored e-cigarettes due to their popularity among teenagers, which he said had reached "an epidemic proportion." British American Tobacco BATS, +6.41% shares rose 6.3% in extremely heavy Wednesday trade, Altria Group Inc. MO, +7.42% shares rose 7% in extremely active trade and Philip Morris International Inc. PM, +4.51% stock rose nearly 5% in heavy trade. FDA Commissioner Scott Gottlieb said earlier this year that though many smokers may use e-cigarettes to smooth the quitting process, he was concerned about young people using the products, particularly the popular brand Juul, which sells such flavors as "crème brulée" and "cool cucumber." Though one Juul pod is roughly equal to a pack of cigarettes when it comes to nicotine strength, only a minority of young people who were familiar with or had recently used the Juul knew that it contained the addictive stimulant, according to one peer-reviewed study. The regulator said on Wednesday that it has asked Juul and others to respond with sufficient plans to reduce teen use, warning them that they chance a ban. The FDA had previously requested information about marketing practices and youth use from Juul’s manufacturer and makers of similar products in early June. British American Tobacco shares have dropped 24.6% year-to-date, Altria shares dropped 10.8% and Philip Morris shares dropped 23.5%, compared with a 7.9% year-to-date rise in the S&P 500 SPX, -0.26% and a 5.2% rise in the Dow Jones Industrial Average DJIA, -0.02%
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