The Dow Jones Industrial Average (^DJI 0.09%) rose sharply Monday morning, up 4.6% by 10:30 a.m. EDT. While the coronavirus pandemic continues to spread across the U.S., greatly reducing economic activity as people hunker down at home, a glimmer of hope in New York State may be giving investors reason to be optimistic. The state reported a lower death count on Sunday than it did on Saturday, the first indication that social distancing is working.
Riding the market higher were IBM (IBM 0.75%) and Walmart (WMT -0.20%). IBM stock rose after Arvind Krishna officially took over as CEO, and Walmart was up despite the retailer limiting the number of customers in its stores.
IBM's new CEO takes over
In late January, tech giant IBM announced that CEO Virginia Rometty would step down after leading the company through a difficult transformation. Under Rometty's leadership, IBM shed legacy businesses, invested in growth areas like artificial intelligence and cloud computing, and closed the massive $34 billion acquisition of Red Hat.
Today, Arvind Krishna takes over as CEO, with former Red Hat CEO Jim Whitehurst assuming the role of president. In a letter to employees on Monday, Krishna laid out his vision for the century-old tech company.
Hybrid cloud computing will remain a core focus of IBM. Krishna believes that IBM's hybrid cloud business can be the company's fourth enduring platform, joining mainframe, services, and middleware. "An essential, ubiquitous hybrid cloud platform our clients will rely on to do their most critical work in this century. A platform that can last even longer than the others," Krishna said.
Krishna also sees an opportunity to make Red Hat's OpenShift platform the default choice for hybrid cloud, mirroring the popularity of Red Hat's Enterprise Linux operating system. IBM isn't going to win the battle for the public cloud infrastructure market, currently dominated by Amazon.com's Amazon Web Services and Microsoft Azure. But the company sees hybrid cloud as a $1 trillion opportunity.
With the coronavirus pandemic hurting economies around the world, it's unclear how IBM's results will be affected this year. But Krishna is confident in IBM in the long run: "When this crisis ends, I'm confident that IBM will emerge strong, and we will be focused on growth. Few companies have the trust, credibility and cumulative wisdom to change the fabric of society through technology the way that IBM can."
Shares of IBM were up about 5.8% Monday morning. The stock is down roughly 29% from its 52-week high.
Walmart limits the number of people in stores
Walmart enjoyed robust sales growth while people were frantically stocking up on supplies during the early stages of the coronavirus crisis. The Wall Street Journal reported last week that the company's U.S. store sales rose by nearly 20% in March, incredible growth for such a large retailer.
With deaths from the virus still rising rapidly in the U.S., Walmart is taking steps to limit its impact on the spread. It said on Friday that it's seeing some behaviors in its stores that are putting employees and customers at risk. In response, Walmart began limiting the number of customers in its stores on Saturday. Stores will now allow up to 5 customers per 1,000 square feet at a time, and will follow a "one out, one in" policy for managing customer density.
Walmart also plans to use floor markings and directions from employees to limit movement in aisles to one direction. The company believes this will reduce close contact among its customers. Shoppers will also be directed to exit the store through a different door than the one they entered through, minimizing the chance of people closely passing one another.
These moves will likely hurt sales, putting a hard limit on how many customers can visit its stores at any one time. Shares of Walmart were up 3.2% Monday morning; the stock is now only slightly below its 52-week high.