The stock market was having a very strong day on Wednesday. As of 12:40 p.m. EDT, the Dow Jones Industrial Average was up by 1.6% and the benchmark S&P 500 index was higher by 1.2%.
Leading the way were many stocks that have been among the market's worst performers during the coronavirus bear market. Mall operators and other retail real estate investment trusts were up by double digits for the day in many cases. Leading mall REIT Simon Property Group (SPG -2.17%) was up by nearly 15% and was the biggest gainer on the S&P 500 as of midday, while outlet mall REIT Tanger Factory Outlet Centers (SKT -0.84%) was higher by just over 10%. And Seritage Growth Properties (SRG -3.17%), the REIT created to redevelop old Sears properties into mixed-use developments was one of the biggest winners -- up 19% today alone.
The news concerning the reopening and rebound of the U.S. economy has been extremely encouraging lately -- both on a general level and in ways that are specific to retail.
We'll start with the general news. All 50 states are now in some stage of reopening their economies, and many are rather far along in the process. Moreover, contrary to many experts' fears, we haven't seen any major spikes in new infections, and the overall U.S. case numbers continue to trend downward, according to data from Johns Hopkins.
Recently, we've seen positive consumer confidence data, and today we learned that the service sector of the economy rebounded more than expected in May. Visa (V -0.98%) recently revealed that U.S. payment volume only declined by 5% year over year in May (compared to a drop of 18% in April), indicating that consumers may be more willing to get out and spend money than previously thought.
We're also seeing some impressive data from retailers, especially those who primarily operate in brick-and-mortar retail stores. American Eagle Outfitters (AEO -3.58%) just revealed that demand has been extremely strong in its stores, with sales in the 556 locations that have been reopened to date averaging 95% of normal levels. This comes on the heels of a similar report from Abercrombie & Fitch (ANF 1.73%) last week showing demand returning rapidly as well.
Finally, Cheesecake Factory (CAKE -2.44%), a major tenant in Simon's malls, reported that its reopened restaurants are seeing sales volume that is 75% of the same time last year. Cheesecake Factory was the first major mall tenant to publicly declare an inability to pay April's rent when the pandemic started, so this is certainly encouraging news.
The bottom line is that virtually all of the recent news points toward a stronger-than-expected rebound for brick-and-mortar retail as the economy starts to reopen. Obviously, the COVID-19 pandemic remains a serious threat, and it's entirely possible we haven't seen the last major retail bankruptcies of 2020, but mall operators are finally starting to see light at the end of the tunnel.