Please ensure Javascript is enabled for purposes of website accessibility

Why Macy's and Other Retail Stocks Closed Higher Today

By John Rosevear – Jun 3, 2020 at 3:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There were new signs that the economy is recovering.

What happened

Investors were in a buying mood on Wednesday, as state and local authorities continued to ease coronavirus-related restrictions and after a May jobs number came in better than analysts had expected. 

The developments add to a growing sense that the U.S. economy is rebounding, and many hard-hit consumer discretionary retail stocks had a good day on Wednesday.

  • Bed Bath & Beyond (BBBY 0.16%) closed at $8.08, up 7%.
  • Designer Brands (DBI 1.49%) closed at $7.78, up 16.8%.
  • Gap (GPS 0.60%) closed at $11.95, up 12.2%.
  • Kohl's (KSS 0.63%) closed at $22.90, up 8.8%.
  • L Brands (BBWI -1.01%) closed at $18.32, up 9.1%.
  • Macy's (M 4.01%) closed at $7.86, up 12.9%.

So what

All of these companies' stocks have had wild rides over the last couple of months. Nearly all of their stores were closed in March, amid social-distancing measures intended to slow the spread of the SARS-CoV-2 virus. 

A Macy's sign outside a store.

Image source: Macy's.

While most began reopening stores in May, their stocks have been volatile, trading up or down-- often dramatically -- as investors gauge the state of consumers' willingness to spend discretionary income and return to brick-and-mortar stores.

That gauge was looking relatively good on Wednesday, after payroll-processor ADP reported that the private sector shed 2.76 million jobs in May. That was a sobering number, but far better than the 9 million lost jobs that analysts had expected -- and a huge improvement over the record 19.56 million jobs lost in April. 

It was enough to add to a growing sense that the U.S. economy bottomed in April and is now recovering. If so, it's very good news for brick-and-mortar retailers. 

Now what

While the news is optimistic, and the consumer discretionary sector's move upward makes sense in context, investors should keep in mind that we're not out of the woods yet. We don't yet know whether the pandemic will have a second wave later this year, and -- even if it doesn't -- it's not yet clear how quickly consumer spending will recover, with so many jobs lost.

But that said, things are looking a lot better for all of these companies, and their investors, than they were six weeks ago. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool recommends Designer Brands Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Kohl's Corporation Stock Quote
Kohl's Corporation
KSS
$25.70 (0.63%) $0.16
The Gap, Inc. Stock Quote
The Gap, Inc.
GPS
$8.44 (0.60%) $0.05
Macy's, Inc. Stock Quote
Macy's, Inc.
M
$15.82 (4.01%) $0.61
Bath & Body Works, Inc. Stock Quote
Bath & Body Works, Inc.
BBWI
$34.40 (-1.01%) $0.35
Bed Bath & Beyond Inc. Stock Quote
Bed Bath & Beyond Inc.
BBBY
$6.38 (0.16%) $0.01
Designer Brands Inc. Stock Quote
Designer Brands Inc.
DBI
$15.00 (1.49%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.