Stock surges as record retail sales jump, and a potential treatment for COVID-19.

On Tuesday, June 16, 2020, it was reported that stock rose as a result of the surge in retail sales. This is coupled with the positive trial results from a potential treatment for the coronavirus pandemic ravaging the world. This good news has been long-awaited, as the unfathomable effect of COVID-19 on the US economy is fast becoming a thing of worries. In fact, these two simultaneous incidents sent market sentiment soaring.

 For instance, on Monday, the Dow Jones Industrial Average closed 157.62 points higher after the blue-chip index fell more than 760 points earlier in the session. The S&P 500 gained 0.8% while the Nasdaq Composite advanced 1.4%. The S&P 500 and Nasdaq had fallen as much as 2.5% and 1.9%, respectively, before erasing those losses.

Today, prior to the surge in retail sales, the Dow Jones Industrial Average traded about 500 points higher or 1.9%. in the same vein, the S&P 500 gained 1.8% while the Nasdaq composite rise to 1.6%

Added to this, in the month of May, the United States government recorded a 17.7% increase in retail sales. The economist poll by the Dow Jones' analysis is expecting a gain of 7.7%. In fact, the United States' President, Donald Trump, in his twitter account commented that “ looks like a BIG DAY FOR THE STOCK MARKET AND JOBS.”

The news of the effectiveness of a potential COVID-19 drug added to the positive result. The name of the said drug is dexamethasone- a widely available drug that is believed to help reduce the severity of critical COVID-19 patients. The drug has been said to reduce the death rate to up to one third 

"A potential COVID-19 steroid treatment in the UK combined with record retail sales and news of additional stimulus has been met with unbridled optimism," said Mike Loewengart, a managing director at E-Trade. "We've been used to seeing record lows in economic fundamentals over the past few months and to see the pendulum swing so far in the other direction is nothing if not encouraging."

The companies whose shares would benefit from this economic reopening include United, Delta, and American Airlines all rose at least 6.5%. Norwegian Cruise Line, Carnival, and Royal Caribbean jumped more than 7% each. MGM Resorts, Kohl's, and Simon Property advanced 5.6%, 11.4%, and 7.2% respectively. 

"The [S&P 500] followed last week's sizable drawdown with a daily positive reversal for the ages yesterday," said Frank Cappelleri, executive director at Instinet. "If there was ever an example of unadulterated dip-buying, we saw it yesterday."