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. 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.

Reuters June 17, 2020 00:07:21 IST
Wall Street jumps as May retail sales boost hopes of swift recovery

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.

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.

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