SolarCity and Weibo Shares are Rising
In another morning of up and down trading, the Dow Jones Industrial Average had lost just five points as of 11:30 a.m. EDT. Dow Jones component AT&T was modestly outperforming the index, while tech stocks SolarCity and Weibo were experiencing significant rallies.
Inflation ticks up
The U.S. Bureau of Labor Statistics said on Tuesday that the Consumer Price Index, typically seen as the most reliable indicator of inflation, in May rose rose 0.4% on a month-over-month basis. Economists had only expected a gain of 0.2%. Core CPI, a measure that excludes the cost of food and fuel, rose 0.3%, compared to a 0.2% estimate.
Although excessive inflation can be dangerous, a modest rise in price levels suggests the economy is doing better than anticipated -- prices are ticking up as demand increases. However, higher demand may limit the Federal Reserve's willingness to continue supporting the U.S. economy, which could be seen as a negative for stocks.
AT&T said to get Amazon's smartphone as an exclusive
AT&T shares were slightly in the green after The Wall Street Journal reported that the wireless carrier would get exclusive rights to Amazon.com's forthcoming smartphone. Customers who want the phone will be forced to get service through AT&T.
Amazon is expected to unveil its smartphone tomorrow at a major media event in Seattle. Amazon's phone could include a number of unique features and be of particular use to loyal Amazon customers and Prime subscribers. If Amazon's phone is attractive enough, it might win some new customers over to AT&T.
SolarCity buys a panel maker
SolarCity shares rose 11% in early trading on Tuesday, making it one of the best-performing tech stocks. The gain comes after the company announced that it had acquired Silevo, a manufacturer and designer of solar panels.
SolarCity said the acquisition will benefit the its operations, as the company will gain advantages from economies of scale. Chairman Elon Musk reiterated that SolarCity's goal is to deliver cheap solar power.
Prior to the acquisition, Silevo had planned a manufacturing facility in New York. Those plans will go forward under SolarCity, and the company has said it intends to boost its manufacturing capacity in the future. Investors are reacting favorably to the news, and for good reason: By acquiring a solar panel manufacturer, SolarCity is taking greater control of its supply chain.
Weibo remains volatile
Shares of Chinese Internet companies rose early on Tuesday. Weibo was the best-performing of the group, with its shares gaining over 6%. It wasn't abundantly clear why Weibo was rising, but the move is far from surprising -- since its IPO in April, shares have experienced wild daily swings.
At current levels, Weibo is little changed from its initial market price, though it's down more than 12% from its post-IPO rally.
The Chinese Internet space has been hot in recent weeks. Recently, China's Alibaba group acquired UCWeb, the maker of China's most popular mobile browser. The merger may boost Alibaba's mobile presence, but also highlights the interest in Chinese Internet names, of which Weibo is a major player.
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The article SolarCity and Weibo Shares are Rising originally appeared on Fool.com.Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and SolarCity. The Motley Fool owns shares of Amazon.com and SolarCity. 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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