Tobacco stocks are surging after the FDA threatens to pull flavored e-cigarettes

  • Tobacco stocks are surging after the Food and Drug Administration threatened the industry to combat the widespread flavored electronic cigarette use among young people.
  • The FDA found top-selling brands were popular among minors.
  • The FDA set a 60-day deadline for five major tobacco manufacturers to provide a plan for mitigating youth sales, or the agency will pull them out of the market.
  • Watch Altria and British American Tobacco trade in real time here.

Tobacco stocks are surging after the Food and Drug Administration threatened Wednesday to pull flavored electronic cigarettes like Juul off the market if the industry fails to combat the epidemic of youth e-cigarette use.

Following the news, shares of Altria, which owns the MarkTen brand, surged more than 7%, and British American Tobacco, which owns Vuse and Logic brands, jumped more than 6%. 

RELATED: Take a look at state of the New York Stock Exchange before Trump's election:

11 PHOTOS
New York Stock Exchange before the election
See Gallery
New York Stock Exchange before the election
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2016. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2016. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2016. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2016. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 3, 2016. REUTERS/Brendan McDermid
Pedestrians walk along Wall Street near the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Oct. 31, 2016. U.S. stocks rose from a six-week low amid an increase in deal activity as traders assessed the outlook for the presidential election and interest rates in the world's largest economy. Photographer: Michael Nagle/Bloomberg via Getty Images
NEW YORK, NY - NOVEMBER 01: Traders work on the floor of the New York Stock Exchange (NYSE) on November 1, 2016 in New York City. As Wall Street continues to feel election uncertainty, the Dow Jones closes fell more than 100 points. (Photo by Spencer Platt/Getty Images)
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Nov. 4, 2016. U.S. stocks fluctuated amid payrolls data that bolstered speculation the economy is strong enough to weather higher interest rates, while investors remained wary before the looming presidential election. Photographer: Michael Nagle/Bloomberg via Getty Images
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Nov. 4, 2016. U.S. stocks fluctuated amid payrolls data that bolstered speculation the economy is strong enough to weather higher interest rates, while investors remained wary before the looming presidential election. Photographer: Michael Nagle/Bloomberg via Getty Images
NEW YORK, NY - NOVEMBER 01: Traders work on the floor of the New York Stock Exchange (NYSE) on November 1, 2016 in New York City. As Wall Street continues to feel election uncertainty, the Dow Jones closes fell more than 100 points. (Photo by Spencer Platt/Getty Images)
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Oct. 31, 2016. U.S. stocks rose from a six-week low amid an increase in deal activity as traders assessed the outlook for the presidential election and interest rates in the world's largest economy. Photographer: Michael Nagle/Bloomberg via Getty Images
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

 

"We see clear signs that youth use of electronic cigarettes has reached an epidemic proportion, and we must adjust certain aspects of our comprehensive strategy to stem this clear and present danger," FDA Commissioner Scott Gottlieb said in a press release

The FDA discovered that top-selling brands like JUUL, Vuse, MarkTen XL, blu e-cigs, and Logic were popular among minors. To address the trend, the agency set a 60-day deadline for the five major tobacco manufacturers to provide a plan describing how they will address the widespread youth access and use of their products. Otherwise, the FDA could require the tobacco makers to stop selling the flavored products that appealed to children.

To gain clearance to return to the market, the companies would have to show evidence that the benefits for adults who use e-cigarettes to stop smoking outweigh the risks associated with youth vaping, Bloomberg reported, citing Gottlieb's words that he is "disappointed in the actions the companies have taken" to try to address the problem.

Now read:

STOCK PRICE FOR MO

Full price information

NOW WATCH: What drinking diet soda does to your body and brain

More from Business Insider: 
Hurricane Florence could bring 40 inches of rain and 13 feet of floodwater in a 'catastrophic' landfall 
Photos reportedly show massive stockpile of bottled water left on a runway for more than a year in Puerto Rico after Hurricane Maria 
24 powerful and moving photos from the September 11 attacks that Americans will never forget

Read Full Story

Markets

DJIA 26,743.50 86.52 0.32%
NASDAQ 7,986.96 -41.28 -0.51%
NIKKEI 225 23,869.93 195.00 0.82%
HANG SENG 27,953.58 475.91 1.73%
DAX 12,430.88 104.40 0.85%
USD (per EUR) 1.18 0.00 0.01%
USD (per CHF) 0.96 0.00 0.02%
JPY (per USD) 112.56 0.01 0.00%
GBP (per USD) 1.31 0.00 0.01%