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Cruise line shares fall after State Dept. warns of 'increased risk' of coronavirus

Julia La Roche

The State Department warned U.S. travelers, especially the elderly and those with underlying health issues, not to take cruises amid the coronavirus (COVID-19) outbreak, sending shares of cruise line operators tumbling.

“U.S. citizens, particularly travelers with underlying health conditions, should not travel by cruise ship. CDC notes increased risk of infection of COVID-19 in a cruise ship environment,” the State Department wrote in an advisory on Sunday.

Shares of Carnival Corporation (CCL) dropped more than 5.27% in the premarket on Monday, while Royal Caribbean (RCL) tanked 7.6% and Norweigan Cruise Line Holdings (NCLH) fell 7.4%. Since the beginning of the year, all three of those major cruise line operators have seen their stocks drop by about 50%.

The State Department’s advisory comes as the Carnival-owned Grand Princess cruise ship, which has about 3,500 people on board, has been in a holding pattern off the coast of California for several days after 19 crew members and two passengers tested positive for COVID-19. The ship is expected to dock in Oakland, Calif. on Monday, and passengers will be quarantined.

“In order to curb the spread of COVID-19, many countries have implemented strict screening procedures that have denied port entry rights to ships and prevented passengers from disembarking. In some cases, local authorities have permitted disembarkation but subjected passengers to local quarantine procedures,” the State Department said.

People look out from aboard the Grand Princess cruise ship, operated by Princess Cruises, as it maintains a holding pattern about 25 miles off the coast of San Francisco, California on March 8, 2020. (Photo by Josh Edelson / AFP)

Going forward, the State Department said: “repatriation flights should not be relied upon as an option for U.S. citizens under the potential risk of quarantine by local authorities.”

“This is a fluid situation. CDC notes that older adults and travelers with underlying health issues should avoid situations that put them at increased risk for more severe disease. This entails avoiding crowded places, avoiding non-essential travel such as long plane trips, and especially avoiding embarking on cruise ships.”

At the time of this writing, the number of coronavirus cases worldwide surpassed 110,000, with deaths last reported at 3,831. In the U.S., coronavirus cases topped 500, with deaths now at 22, according to Johns Hopkins.

Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter

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