In another morning of up and down trading, the Dow Jones Industrial Average (DJINDICES: ^DJI ) had lost just five points as of 11:30 a.m. EDT. Dow Jones component AT&T (NYSE: T ) was modestly outperforming the index, while tech stocks SolarCity (NASDAQ: SCTY ) and Weibo (NASDAQ: WB ) 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 (NASDAQ: AMZN ) 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.
Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!