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The U.S. continued to lead the world in number of cases of COVID-19 on Tuesday, as state governors continued to complain about inadequate testing and predict that the worst is yet to come.
The governors of New York, Montana, Ohio, Washington and Virginia have said they are struggling with containment efforts because of a shortage of testing kits and that message was repeated on a call with President Donald Trump on Monday, according to media reports.
Trump said he had not “heard about testing in weeks,” suggesting the issue was no longer a problem, according to media reports, including the New York Times. New York Gov. Andrew Cuomo said he expects the peak number of cases in the state to come in the next six to 21 days.
New York has 75,795 cases of the virus, according to Cuomo at a press briefing on Tuesday, and at least 1,550 New Yorkers have died. There are 10,929 people being treated in hospital, 2,710 of whom are in ICU. A tent hospital is expected to open in Central Park on Tuesday to alleviate the overcrowding elsewhere. The makeshift facility, which is being funded by the charity Samaritan’s Purse, will have 68 beds and will treat coronavirus patients from Mount Sinai Health System’s hospitals in Brooklyn and Queens.
The move comes a day after a naval hospital ship arrived on Manhattan’s west side and the Javits Convention Center’s 1,000-bed temporary hospital opened.
There are now 809,608 cases of COVID-19 around the world and at least 39,545 people have died, according to aggregated data from the Center for Systems Science and Engineering at Johns Hopkins University. At least 172,869 people have recovered.
The U.S. tally now stands at 165,874 cases and at least 3,178 deaths, which means the death toll now surpasses the number of people who died in the attacks of Sept. 11, 2001. At least 5,995 people have recovered.
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In Europe, Italy and Spain are still hot spots and both recorded steep increases in new cases and confirmed deaths overnight. Italy has 101,739 cases and 11,591 deaths. Spain’s tally is 94,417 cases and 8,189 deaths. The Spanish outbreak brought 9,222 new cases and 849 deaths in a single day, according to its Health Ministry. Italy and Spain held a minute of silence at 12 p.m. to honor their dead.
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China now has the fourth highest number of cases at 82,278 and 3,309 deaths. Germany has 68,180 cases and 682 deaths. France has 45,232 cases and 3,032 deaths and Iran, another hot spot, has 44,605 cases and at least 2,898 deaths.
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The White House is expected later Tuesday to release models that demonstrate the expected trajectory of the illness and it’s expected to be grim. Dr. Deborah Birx, a key member of the Task Force created to manage the U.S. response to the pandemic, has said the death toll in the U.S. could be between 100,000 and 200,000 people.
House Speaker Nancy Pelosi said the $2.2 trillion relief bill may not be sufficient to tackle the crisis and has proposed a ‘Phase 4” program that would include funding for state and local leaders and include proposals on clean water, infrastructure repairs and rural broadband. Pelosi is expecting Americans will need additional payments with many now out of work temporarily or permanently.
Companies continued to announce the same measures they have been implementing since the start of the outbreak on Tuesday, including furloughs, the suspension of dividends and share buyback programs and other measures to conserve cash. Some companies are attempting to tap capital markets for funds, including cruise operator Carnival Corp., which announced plans to issue stocks and bonds.
On Monday, Yum Brands, the operator of Pizza Hut and KFC, became the first company to attempt a high-yield, or junk bond deal, since early March, raising $600 million by issuing notes that mature in 2025. The deal was increased from an original plan to raise $500 million, suggesting some level of investor confidence, even as credit rating agency Moody’s Investors Service cut its outlook on Yum’s rating to negative and criticized the company for raising debt levels in the midst of the uncertainty.
The drumbeat of companies that have switched gears to produce equipment such as face masks and gloves, all of which are in short supply, continued with Ralph Lauren RL, -1.47% saying it will donate 250,000 masks and GM GM, +1.17% pledging to deliver its first 20,000 face masks by next week.
Biotech CytoDyn Inc. CYDY, +9.66% said the U.S. Food and Drug Administration has allowed the company’s Phase 2 trial testing its experimental drug leronlimab in COVID-19 patients to move forward. The investigational therapy has not been approved for any indications; for COVID-19, it’s being proposed as a treatment for mild-to-moderate respiratory complications that occur in patients with the disease. CytoDyn had been studying the experimental therapy as a treatment for people with HIV and a form of metastatic breast cancer.
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Here’s what companies are saying about COVID-19 on Tuesday:
• Ann Taylor parent Ascena Retail Group ASNA, -2.05%, which closed down its Dressbarn chain late last year amid struggles, will furlough all of its retail employees and half its corporate staff, and cut executive salaries in half. Distribution centers will remain open and operate at limited capacity. Ascena had 53,000 employees as of Aug. 3, 2019.
• Buckle Inc. BKE, -6.89% will keep its stores closed until further notice and furlough most of its store associates and corporate workers starting April 5. Buckle’s Chief Executive Dennis Nelson will forego his salary until operations resume, and the company’s board has chosen to forego their retainers for the current quarter.
• Carnival Corp. CCL, +4.77% is suspending its dividend and share buyback program to conserve cash. The cruise operator is also reducing capital expenditures and operating expenses and pursuing additional financing, and expects a net loss for the fiscal year ending Nov. 30. As a result of these actions, the company expects to generate sufficient liquidity to remain in compliance with its debt covenants for the next 12 months, prior to giving effect to any additional financing.
• Dollar Tree Inc. DLTR, -6.22% is withdrawing its fiscal first-quarter and full-year outlook as the discount retailer heads into peak Easter shopping season beneath a cloud of uncertainty. Same-store sales trends soared through March 29, with the namesake chain up 7.1% and Family Dollar up 14.4%. However trends have “moderated,” the company said, with same-store sales at Family Dollar up 8.8% for the seven days ending March 29 and Dollar Tree down 19.4% for the period. As of March 30, Dollar Tree has $1.9 billion in cash and investments, including $750 million drawn down from its $1.25 billion revolving credit line.
• Gap Inc. GPS, -4.92% will furlough the majority of its store teams in the U.S. and Canada, along with corporate workers and will cut executive salaries. Gap previously announced that stores would be closed till April 1, but extended that indefinitely Monday. Gap had 129,000 employees as of the end of January, according to regulatory filings.
• Guess Inc. GES, -1.54% will furlough all of its store associates in the U.S. and Canada starting April 2. The clothing and accessories company will also furlough half of its corporate workers in the U.S. and Canada, and most of the staff in its distribution centers. Guess is also instituting pay reductions for senior management, ranging from 15% to 70% for Chief Executive Carlos Alberini and Chief Creative Officer Paul Marciano. Guess has drawn down $212 million from credit facilities and will postpone declaration of a quarterly dividend.
• Hilton Grand Vacations HGV, -3.09% is suspending its U.S. sales operations, has closed some resorts and is temporarily pausing reservations at its U.S., Europe and Barbados resorts through the end of April. Chief Executive Mark Wang said about 40% of 2019 segment EBITDA was derived from recurring fees in the company’s Club & Resort segments. “Through the end of March, we have collected approximately 90% of our member fees for fiscal 2020, which fund all of the operational costs of our resorts.” The company has a leverage ratio of 1.59 times and had just over $1 billion in liquidity at end-February.
• Hair salon operator Regis Corp. RGS, -1.58% has temporarily closed all of its company-owned stores for at least two weeks. The operator of salon brands including Supercuts, Cost Cutters and SmartStyle, is furloughing a “substantial majority” of its workforce, representing about 485 employees across its corporate office, field support and distribution centers, starting on April 5 and lasting at least 30 days. The company is cutting its CEO’s salary by 60%.
• Urban Outfitters Inc. URBN, -0.14% will furlough a “substantial” number of employees at the stores, wholesale and home office channels for 60 days, starting April 1, the first time in its 50-year history that it has been forced to furlough workers. Urban Outfitters, which has a portfolio that includes the namesake brand, Free People and Anthropologie, shuttered stores on March 14. Stores will remain closed until further notice, though e-commerce operations will continue. The company is eliminating bonuses and reducing senior management pay, borrowing another $220 million from cash reserves, reducing the capital budget by $100 million and reducing investments in things like the Nuuly brand. The company will also suspend rent payment and extend payment for merchandise.
• Walmart Inc. WMT, -0.09% is taking additional steps to ensure the safety of its workers, including taking the temperature of staff working at its stores, clubs and facilities as they check in for work. “Any associate with a temperature of 100.0 degrees will be sent home, asked to seek medical treatment if necessary, and told to not return to work until they are fever-free for at least 3 days,” the retailer said.
Additional reporting by Tonya Garcia, Tomi Kilgore, Claudia Assis and Jeremy Owens
