Tesla Motors Inc. and General Motors Make Big Announcements
The Dow Jones Industrial Average is trading a mere 13 points higher, or 0.08%, by midafternoon after mixed economic data hit the news feeds. The Institute for Supply Management said the services purchasing managers' index for May was up to 56.3, from April's nonmanufacturing reading of 55.2, according to Morningstar. That was the best reading since August of last year. On the downside of data reported today was that Automatic Data Processing reported 179,000 new private-sector jobs were created in May which was lower than economists' forecast.
With those trends in mind, here are some companies making headlines in the markets today.
Outside of the Dow, Tesla Motors announced disappointing news regarding its plans for the "gigafactory," which will be vital for the company to produce ample supply of batteries for its vehicles going forward.
Tesla reported its plans to break ground in June on one of the planned gigafactories during its first-quarter letter to shareholders. That has now officially been delayed and the plans are now to begin construction by the end of this year. Tesla also reported that it may now choose three gigafactory construction sites rather than two.
The gigafactories are expected to produce enough battery packs to supply roughly 500,000 electric vehicles by the end of this decade and could reduce the cost of production by more than 30%. Investors would be wise to keep an eye on the details surrounding the construction of these factories as well as Tesla's likely partner in the venture, Panasonic Corp.
Inside the automotive industry, General Motors was able to shake off its numerous headlines surrounding its binge of vehicle recalls as the company's sales last month surged 13%, compared to last May.
"The momentum we generated in April carried into May, with all four brands performing well in a growing economy and 17 vehicle lines posting double-digit retail sales increases or better," said Kurt McNeil, U.S. vice president of Sales Operations, in a press release.
General Motor's mainstay Chevrolet brand led the charge with sales driving 14% higher in May, compared to last year, topping 205,000 units sold. Chevrolet's sales accounted for nearly 75% of General Motors overall sales last month. It's yet to be seen if these deadly and numerous recalls will negatively impact sales moving forward.
In other news regarding General Motors' recalls, tomorrow brings investors and onlookers a new development which could be part of the reason GM's stock price is up roughly 4% today.
Tomorrow, June 5, General motors CEO Mary Barra will provide an update on the ignition switch recall which could be the result of the company's internal investigation. Barra will participate in a "Global Town Hall Meeting" with employees and then with a press conference shortly following the conclusion of the town hall meeting. Those events will occur in the morning and then in the early afternoon Barra will hold a conference call with the analyst community and media. Investors should definitely tune in to see if this has any new impact or additional details on the entire recall debacle which will consume a huge chunk of General Motors' profits through the first half of the year.
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The article Tesla Motors Inc. and General Motors Make Big Announcements originally appeared on Fool.com.Daniel Miller owns shares of General Motors. The Motley Fool recommends General Motors and Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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