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Monday was shaping up to be another rough day for the markets, with shares of AT&T (NYSE: T ) and Verizon Communications (NYSE: VZ ) leading the Dow Jones Industrial Average (DJINDICES: ^DJI ) down more than 184 points as of 11:30 a.m. EST. In spite of the market's drop, AOL (NYSE: AOL.DL ) was up more than 4%.
ISM numbers disappoint
Manufacturing data from the Institute for Supply Management came in disappointing on Monday, with a reading of 51.3 falling short of economists' 56.4 forecast. While any reading above 50 indicates growth, a disappointing number suggests that the U.S. manufacturing sector isn't growing as fast as economists had believed. With the Federal Reserve last week reiterating its commitment to drawing down its stimulus program, poor economic data appears to be translating into poor stock performance.
AT&T goes to war with Verizon
AT&T fired another shot at its rival Verizon, and shares of both companies could be falling as a result. Over the weekend, AT&T announced a major new offering that could save families plenty of money and lure them over from the telecom giant's chief rival. Under AT&T's new plan, families get unlimited talk, text, and 10 gigabytes of data for $130 per month for two phones, then $15 for every additional smartphone. In total, a family of five would pay just $175; at Verizon, that same family would pay roughly $300.
Admittedly, AT&T's new plan does not include smartphone subsidies -- families must pay for their own phones outright or use an old phone. Still, it's an aggressive move that could net it many new subscribers. And it's another move in what's quickly becoming a wireless price war in the U.S; while that's good for consumers, shareholders might ultimately be the losers. Verizon and AT&T are both down about 3% in late morning trading.
AOL rises on analyst upgrade
Meanwhile, AOL shares leaped higher on Monday, up more than 8% at one point, before falling back. The catalyst for AOL's move seems to have been a note from Needham. Needham raised AOL's price target from $46 to $57 and reiterated its buy rating. The firm is optimistic about AOL's momentum, believing the company could outperform to the upside.
AOL's management has been making a number of operational moves in recent months, most notably selling local news network Patch last month.
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