A Gap store in New York, August 2, 2020.

Scott Mlyn | CNBC

A number of retail stocks surged Monday, as investors looked for ways to buy into the economy reopening, as several large states further loosened Covid restrictions, or suspended the measures entirely.

The S&P Retail ETF closed Monday up 2%, as a whole host of retail stocks rallied.

Apparel retailers were seeing some of the largest gains, as investors bet that these companies would see sales pick up as people rush to buy new clothes to wear to the office and to go to restaurants and other social events.

Shares of the department store chain Dillard’s closed up 9.7%. Gap shares hit a 52-week high of $37.00, but settled at $35.47, a 7% gain for the day. Macy’s closed up 8%, while American Eagle and Kohl’s gained 5%. Nordstrom and Urban Outfitters shares added 6%.

Florida Gov. Ron DeSantis signed an executive order on Monday that immediately suspends the state’s remaining Covid-19 public health restrictions. New York, New Jersey and Connecticut will begin lifting most of the states’ capacity restrictions starting on May 19. This means businesses like restaurants and gyms will be able to fully open their doors again.

New York Governor Andrew Cuomo’s plan accelerates the timeline that New York Mayor Bill de Blasio laid on Thursday, which had set a July 1 date for a full reopening.

Jefferies analyst Stephanie Wissink said in a Sunday note to clients that apparel spending is poised to benefit from pent-up demand and new fashion trends coming out of the health crisis. Citing data from NPD Group, Wissink noted that 47.5% of consumers in the U.S. are planning to purchase apparel in the next 60 to 90 days.

Gap also saw a lot of activity in its $35 call options, which are set to expire in May. Call options give investors the right, but not an obligation, to buy shares at a specific price by a stated time. The company is set to report first-quarter earnings on May 20,

Gap shares have risen more than 75% since the start of the year, as the company embarks on a turnaround effort. The retailer has been closing stores of its slower growing brands Gap and Banana Republic and expanding its faster ones like Athleta. It recently formed a partnership with famed rapper Kanye West.

—CNBC’s Tom Franck contributed to this reporting.

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