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Wall Street jumps as May retail sales boost hopes of swift recovery

Published 06/16/2020, 06:51 AM
Updated 06/16/2020, 01:20 PM
© Reuters. The spread of the coronavirus disease (COVID-19) in New York

© Reuters. The spread of the coronavirus disease (COVID-19) in New York

By Medha Singh and Devik Jain

(Reuters) - U.S. stocks advanced on Tuesday after a record surge in May retail sales revived hopes of a swift post-pandemic economic rebound, with sentiment also lifted by data showing reduced COVID-19 death rates in a trial of a generic steroid drug.

A Commerce Department report showed overall retail receipts rose 17.7% last month as Americans resumed spending after weeks of lockdown, although the rebound retraces only a fraction of the historic drops in March and April.

Retailers Kohl's Corp (NYSE:KSS) and Nordstrom Inc (NYSE:JWN) surged 7% and 14%, respectively, and were among the top advancers on the S&P 500 index.

"We're continuing to see better-than-expected economic data fuel this bull rally," said Sam Stovall, chief investment strategist at CFRA Research in New York.

Meanwhile, results from a UK-led trial showed giving low doses of generic steroid drug dexamethasone to patients admitted to hospital with COVID-19 reduced death rates by around a third among severe cases.

U.S. stocks ended a volatile session higher on Monday as the Federal Reserve said it would start buying corporate bonds to infuse liquidity. A report overnight said the Trump administration was preparing a nearly $1 trillion infrastructure proposal.

Fed Chair Jerome Powell told U.S. lawmakers on Tuesday that while the economic data is encouraging, a full recovery will not occur until the Americans are sure that the health crisis has been brought under control.

The S&P 500 hit session low after news that Beijing had sharply ramped up restrictions on people leaving the city in an effort to stop the most serious coronavirus flare-up since February from spreading.

The benchmark is now only about 8% below its all-time high hit four months earlier, although the pace of gains have slowed since the Fed issued a grim economic outlook last week.

"Right now, prices are skyrocketing and fundamentals are going nowhere. I need to see upward revisions to earnings forecasts for me to begin to feel better about this market," Stovall said.

At 12:56 p.m. ET, the Dow Jones Industrial Average was up 582.91 points, or 2.26%, at 26,346.07, the S&P 500 was up 64.46 points, or 2.10%, at 3,131.05. The Nasdaq Composite was up 184.32 points, or 1.90%, at 9,910.35.

All 11 S&P sub-indexes were trading higher, led by a 2.8% jump for the healthcare index.

Eli Lilly (NYSE:LLY) and Co advanced 17.3% after its breast cancer therapy Verzenio met the main goal of reducing the risk of it returning in the early stages in a late-stage study.

Industrial giants Caterpillar Inc (NYSE:CAT) jumped 5.1% and Boeing (NYSE:BA) Co 4.6%, leading gains on the blue-chip Dow index.

Advancing issues outnumbered decliners by a 5.62-to-1 ratio on the NYSE and a 3.61-to-1 ratio on the Nasdaq.

© Reuters. The spread of the coronavirus disease (COVID-19) in New York

The S&P index recorded seven new 52-week highs and no new low, while the Nasdaq recorded 95 new highs and five new lows.

Latest comments

Market is banking on tRump being long gone in November. Happier Days Ahead!
Retail ses bump? Oh you mean all the $1,200 checks that werent invested into the market but rather spent online shopping? Yeah, obivously record sales...
I love how a dip is "market fears second wave" and a bump is "market loves recovery hopium". You guys don't have a clue what is driving this Brave New Market.
Another Christmas present from the Fed for billionaires.....
Overleveraged. It will collapse.
The fed will just print more $ or stsrt buyjng individual stocks
Can’t do that forever
Yesterday marked the day that national debt formally passed $26 trillion. This is more than 110% of GDP and more than the percentage when Grace was facing national bankruptcy a few years back. The slogan of make America great again need to be changed to make America bankruptcy.
At the moment I will be more profitable to trade in any currency
Here we go again.. Hope of this and that. Wall Street jumps. Market does not have faith. No. Market has hopes. And market has been hoping for quite some time. Wonder when market will realize were it stands, base on factual macroeconomic data. It is out there you know. But totally neglected. I ain’t buying. Rather loose the opportunity than buy into a declining global economy.
I guess Powell does not have any kids or he is printing money for his own interest.
Boomers in general are spoiled brats.  Even those with kids are willing to run up the debt so they can continue to live beyond their means.
We need a full disclosure of Powell’s financial positions. Dude is pumping his own bank account.
2 trillion to economy stimulus - 1 trillion to infra. I guess the lesson is dollar is here to stay no matter how much funny money is being printed. Might as well join the soring stock market party eventhough reasoning would advice to stay away from funny money inflated market.
infrastructure monies are needed for sure ... wasn't really convinced that the stimulus CV related monies were ... scary for future generations who want/expect more free stuff...what the ***did we collective raise?
tomorrow will be 3% down , just now 2% down in 5 min , the stock market is overvalued, there will be a crash for sure
The fed chairman senator interviewer wais po oping the party. It spooked the market.
it is fake news. I just went to nissan dealer yesterday. no sale.
as long as you use cash to buy stocks these will keep going up. The FED is the cash factory. You print more, it devaluates against all assets. People chose stocks as the asset. So, it is not really stocks going up. It is the perceived value of cash that is going down.Bottom line, STAY LONG for the time veing
Exactly, an asset is only truely appreciating when it and only it, is moving up. Here, the dollar is moving down.
Headline changes every day
So if everything is so great, can we stop now with the stimulus?
Nasdaq at ATH & largely remote-work not affected by virus. If we pump that a day longer, it would be criminal.
during the reopening, the data should be better..... compare with totally lock down. my question is the revenue is enough for cost?
Typical armchair qbs here. They told everyone the usa econ is in deep #. If it is not, they blame. Real investors, traders have to admit their wrong n change their positions.
No writer's personal name wants to be associated with such fake and pumped news. Totally brain dead to compare against the prior month where the economy was closed, rather than the prior year's month. -- IT IS FRAUD TO MAKE SUCH A COMPARISON. IT IS DEAD WRONG TO HYPE THE NEWS HERE,
why FED tried so hard of the economics is in good shape?
if*
Because Donald is pulling the strings until November. He thinks his election prospects are tied to the stock market. He'll point to All Time Highs and say, "Look how great the economy is because of me".
The market is up because of all the stimulus and liquidity... So the more stimulus the lesser ppl think of the negatives
Futures jump as "casino" reopen
The Casino's hours are open from 9:30am-4pm Mon-Fri with offtrack "betting" pre and post!
Everyone is just looking at the positive here. Look at the corona virus cases... Thats not going help the economy long term and seeing that yhe second wave comes in will we get a second round of stimulus checks?
The customer was strong coming into this crisis.. Higher saving rates + significant stimulus. Points to a V-Shaped in my opinion and markets keep moving higher from despite risk in the economy.
But of course the retail numbers were going to go up for May after the lockdown, not at all surprising news, but i am still confused the market moving forward even after the news of potential second wave outbreak.
The number is better than forcasted. Even if we have second, third wave, we wont shut down. Life goes on as near normal.
brrrrrrrrr. meltups followed irregulary by big, on a timeline not predictable drawdowns. good luck with that ...
lots of shoppings were done during riots. They seem to be included.
hehehehe
"Futures jump on Covid Breakthrough" should be the headline!
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