What happened

For the second day in a row, stock markets are glowing bright green Tuesday, with the Dow up 2.5% and the Nasdaq up 1.4% as of 1:45 p.m. EDT.

Some of the stocks reacting most ebulliently to these updates are retail companies catering to discretionary consumer spending on clothing and footwear.  

In mid-afternoon trading, shares of Foot Locker (FL -0.41%) stock are up 7.6%. American Eagle Outfitters (AEO -0.38%) is doing even better -- up 11.7%. Hard-hit G-III Apparel (GIII -1.63%), which makes clothing and footwear under its own brand names such as G-III and DKNY, as well as under licensed brands such as Calvin Klein and Dockers, and whose shares are down more than 80% over the past year, is doing the best of all today. G-III shares are up 32.4%.

Three colorful arrows racing straight up on a black background

Image source: Getty Images.

So what

All of this appears to be happening in response to the coronavirus updates alone.

News headlines today are highlighting that Italy just reported the lowest number of new coronavirus infections in nearly three weeks, and that COVID-19 mortality rates declined for four straight days (until today) in Spain. In New York City, too, Gov. Andrew Cuomo announced Monday that the numbers of COVID-19 deaths have been "effectively flat for two days."

There doesn't seem to be any specific news relating to any of these three retail stocks.

Now what

Does this make sense? After all, while downbeat notes might not be getting as much attention from the media, the coronavirus news is hardly all good today. Total confirmed cases worldwide are rapidly approaching 1.4 million, according to Johns Hopkins University, and more than 90,000 people have died from COVID-19. 

Mortality numbers in New York City may have stabilized, but total New York state deaths from COVID-19 rose on Monday -- the state's biggest one-day jump to date. And new cases of the coronavirus -- both in the U.S. and worldwide -- likewise resumed rising today after falling on Monday, according to the European Centre for Disease Prevention and Control.  

All that being said, the simple fact that we're getting some good news this week, after so many weeks of nothing but bad news, is sparking hope among investors that -- at some point -- this pandemic will be behind us, and the recession it caused, as well. Assuming these companies can survive to see that day, and resume earnings at the rate they did before the COVID-19 pandemic, today's valuations -- six times 2019 earnings at American Eagle, less than five times earnings at Foot Locker, and barely two times earnings at G-III -- should one day turn out to be screaming bargains.

For those with the patience to wait for that day, today's prices could indeed be cheap enough to justify a bit of optimism.