Wall Street jumps as May retail sales boost hopes of swift recoveryWall Street jumps as May retail sales boost hopes of swift recovery
FILE PHOTO: A man wears a protective mask as he walks on Wall Street during the coronavirus outbreak 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 and Nordstrom Inc surged 9.4% and 11.8%, respectively, and were among the top advancers on the S&P 500 index.

“We had retail sales which is giving signals to the investing community that things are better than first assessed,” said Andre Bakhos, managing director at New Vines Capital Llc at Bernardsville, New Jersey.

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

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.

“The Fed committing to buying corporate bonds is also giving the market confidence that it is going to be there on several levels,” Bakhos said.

The S&P 500 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.

In his prepared remarks, Fed Chair Jerome Powell reiterated the United States faces an uncertain, uneven and prolonged recovery from the coronavirus crisis.

At 11:20 a.m. ET, the Dow Jones Industrial Average was up 421.70 points, or 1.64%, at 26,184.86, the S&P 500 was up 49.90 points, or 1.63%, at 3,116.49. The Nasdaq Composite was up 142.12 points, or 1.46%, at 9,868.14.

All 11 S&P sub-indexes were trading higher, with energy, technology and materials climbing about 2% each.

Industrial giants Caterpillar Inc jumped 5% and Boeing Co 4%, leading gains on the blue-chip Dow index.

Eli Lilly and Co jumped 14.1% 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.

Advancing issues outnumbered decliners by a 5.43-to-1 ratio on the NYSE and by a 3.16-to-1 ratio on the Nasdaq. The S&P index recorded six new 52-week highs and no new low, while the Nasdaq recorded 84 new highs and four new lows.

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