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

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.

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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 and Nordstrom Inc 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 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 jumped 5.1% and Boeing 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.

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.

(Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur)

This story has not been edited by Firstpost staff and is generated by auto-feed.