Stocks surge as stay-at-home orders ease, reopening revs up

The push to reopen businesses gained momentum Tuesday, with the stock market surging and several states easing more stay-at-home orders.

Despite shutdown orders keeping much of New York City dormant, Gov. Andrew Cuomo helped ring the opening bell at the New York Stock Exchange, which opened to in-person trading for the first time since March.

The action on the trading floor served as a harbinger of economic activity inching back to life in the U.S.

Consumer confidence ticked up in May with all 50 states starting phased reopenings, the Conference Board reported Tuesday.

Air travel got a boost over the holiday weekend, with more than 300,000 passengers passing through airport checkpoints on both Thursday and Friday. While those numbers were far lower than the typical 2 million daily travelers for Memorial Day, the uptick from the past two months was the first bright sign in weeks for the hard-hit airline industry.

White House economic adviser Larry Kudlow called it “grounds for optimism.”

“People are probably looking down the road, they realize this is temporary and they believe they are going to go back to work and businesses will reopen. I think that’s a big plus,” he said.

In the hardest-hit state of New York, all regions except the New York City area are expected to be up and running, at least partially, by the end of the week.

Virginia Gov. Ralph Northam, a Democrat, said he would begin reopening Friday the parts of the state, such as Northern Virginia and Richmond, that have remained closed. D.C. Mayor Muriel Bowser, a Democrat, said the nation’s capital is set to enter phase one of reopening on Friday.

Mr. Cuomo is set to travel to Washington on Wednesday to talk infrastructure with Mr. Trump.

“You need to start the economy, you need to create jobs, and you need to renew and repair this country’s economy and infrastructure. Now is the time to do it,” Mr. Cuomo said.

Some Democrats mused about substituting Mr. Cuomo for former Vice President Joseph R. Biden to be their party’s presidential nominee when the governor’s daily press briefings on COVID-19 became must-watch national news early in the pandemic.

But Mr. Cuomo has come under searing scrutiny, especially in protecting nursing home residents, and the slow pace of reopening.

More than 4,500 recovering patients were sent to nursing homes under a since-modified state directive, according to an Associated Press tally.

The policy was intended to free up bed space in hospitals for a COVID-19 case surge, but it risked spreading the coronavirus to the most vulnerable population. The New York Health Department said people 70 and older account for more than 65% of COVID-19 deaths.

“What New York did was to follow what the Republican administration said to do. Don’t criticize the state for following the president’s policies,” Mr. Cuomo said over the weekend.

On Wall Street, the Dow Jones Industrial Average climbed about 530 points, or 2.2%, to 24,995 on Tuesday, buoyed by optimism about the economy and reports of progress by companies racing to develop a vaccine.

While still relatively low, the U.S. consumer confidence index ticked up to 86.6 in May from 85.7 in April.

Lynn Franco, senior director of economic indicators at the Conference Board, said a recent “free fall” in consumer confidence stopped in May after two months of “rapid decline.”

“We’re certainly closer to a slowing of the decrease,” said Brian Kench, dean of the University of New Haven’s Pompea College of Business. “The optimism I see is that the negative is slowing. And so I think that’s what you’re picking up with bookings and general optimism.”

The Mortgage Bankers Association recently reported that applications for home purchases increased for five straight weeks after plummeting in April.

The Transportation Security Administration reported that 340,769 travelers went through its security screenings on Memorial Day.

That was down 86% from a year ago, but it was almost four times the 87,534 travelers the agency reported on April 14, which was the single-day low since COVID-19 took hold.

The April 14 figures were off 96% from 2019.

“There’s more traveling going on, more gas demand, very, very strong housing demand,” Mr. Kudlow said. “Some of the housing surveys were ahead of pre-pandemic. And businesses are opening.”

To be sure, millions of Americans are still feeling economic pain from the lockdowns.

The Labor Department reported last week that another 2.4 million people had filed unemployment claims, bringing the total number to 38.6 million since the coronavirus took hold March.

Experts have suggested that the U.S. unemployment rate could top 20% in May after spiking to 14.7% last month, and it could remain in double digits for the rest of the year.

Former acting White House Chief of Staff Mick Mulvaney said Tuesday that the country might have overreacted to the pandemic and that he would feel comfortable sitting in the middle seat on an airplane if people were wearing protective masks.

“We’ve overreacted a little bit,” Mr. Mulvaney said on CNBC. “It’s time to sort of deal with this in the proper perspective, and that’s to allow us to get back to work safely.”

Congress has tried to prop up the economy by passing close to $3 trillion in rescue legislation in recent weeks, including direct payments of up to $1,200 for millions of Americans and a $600-per-week boost to regular unemployment checks.

White House senior adviser Kevin Hassett said this week that the administration is considering another round of direct payments to Americans, but he added that the economy might be in good enough shape that the administration can move on to other priorities such as cutting capital gains and payroll taxes.

“Obviously, the virus is in charge still,” Mr. Kench said. “If we’re not prepared for the second wave and we take the mass closure route, that could be devastating to the economy.”