By Suzanne McGee, The Fiscal Times

Like the rest of the world, investors and traders may have gasped in horror at the images of one of Carnival Cruise Lines' (CCL) largest ships lying on its side along the Italian coast after its captain allegedly sailed too close to the rocks. And like the rest of the world, investors and traders may have recoiled at the news of the victims who couldn't get off the boat in a timely manner.

But that's not why investors and traders spent Tuesday busily dumping Carnival stock, which lost nearly 14%.

Markets may be swayed by fear and hope, but when it comes to events like the capsizing of the Costa Concordia, they just aren't sentimental. Rather, it's the fact that the cruise ship industry -- already struggling from the economic woes in Europe and tremendous volatility in fuel prices, which is one of its major nonfixed costs -- has been dealt a nasty blow at the time of year it can least afford more bad news.

Anywhere from a third to half of all cruises are sold to winter-weary travelers between January and the end of March. The accident, however bizarre and exceptional the cause may prove to be, is a stark reminder that the oceans aren't always safe and controllable.

Given that the cruise industry is focused on convincing the 80% or so of Americans who have yet to take a cruise to stick their toes in the water and book themselves onto a five-day Mediterranean jaunt, this is the worst kind of publicity imaginable. Even the implicit promises cruises offer -- the fact that travelers will be on board a ship with people just like them and land excursions will be carefully controlled, that cruises will often be all-inclusive with few extra charges to budget for and that cruises are often more child-friendly than other affordable holiday options -- can't outweigh the drama of a possible sinking.

For Carnival, in particular, to fill its ships going forward is likely to require heavy discounting, at least for a while -- a strategy that will eat into the company's profits. The risks for rivals like Royal Caribbean Cruises (RCL), whose stock price fell 6% Tuesday, aren't any different than they have ever been.

Carnival is blaming the captain for the fatal error, but the fact that he may have felt he could deviate from the course may also be seen as an indictment, albeit indirectly, of the company itself. If Carnival's rivals can avoid having to discount their own offerings and can emphasize their safety track records, their stock prices may rebound more rapidly.

As long as the pictures continue to hit every television screen and computer monitor around Europe, North America, Japan and Australia, however, don't look for Royal Caribbean's stock to bounce back. But as the focus shifts slowly to an investigation of what caused this accident aboard a ship owned by a different company, and if  Royal Caribbean manages to keep its cabins full of cruisers willing to pay close to normal rates for their berths, the shares may begin to recover more rapidly than Carnival's.

Investors hoping for a quick turnaround in Carnival, however, may find themselves waiting for quite some time.

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