What happened

The stock market is sharply higher on Monday, with the Dow Jones Industrial Average and S&P 500 both higher by almost 5% as of 10:45 a.m. EDT.

Some stocks are doing far better than the major indexes, especially those that have been beaten down over the past month and a half or so as the coronavirus pandemic got worse. Realty Income (NYSE:O) is one of the standouts today -- shares of the net-lease real estate investment trust (REIT) are up 9%.

People eating in a restaurant.

Image source: Getty Images.

So what

Realty Income is a REIT that specializes in single-tenant commercial properties, particularly those occupied by retail tenants. Most of the portfolio consists of essential businesses that are still open and making money -- think drugstores, big-box retailers, home improvement stores, and grocery stores, just to name a few.

On the other hand, there are some tenants in Realty Income's portfolio whose businesses are closed entirely. For example, about 7% of the company's rental income is from health and fitness businesses, and another 9.3% is from restaurants. About 6.7% is from movie theaters, with AMC Entertainment and Regal both among Realty Income's top 20 tenants. 

In short, if the coronavirus-related business closures last for a long time, Realty Income could see some bankruptcies from tenants, which in turn will hurt its revenue.

Now what

The reason for Monday's rally is that we're finally starting to see some glimmers of hope that the pandemic could be starting to turn a corner. The number of new cases and deaths appear to be slowing down in the hardest-hit European areas, and New York reported its first daily decline in COVID-19 deaths on Sunday.

While it's too soon to tell whether we're going to see a sustained decline in the numbers, there is certainly some much-needed good news today.