Investors in Twitter (TWTR +0.00%) and iRobot (IRBT +0.00%) were active on Monday, with both stocks experiencing early swings. The Dow Jones Industrial Average (^DJI 1.06%) was broadly higher, rising more than 130 points as of 11:30 a.m. EST. Dow component Verizon Communications (VZ +1.63%) led the index higher.
Markets rise after industrial production beat
Data on industrial production, a measure of output from factories, mines and utilities, may have been helping the market rally. On a month-over-month basis, industrial production increased by 1.1% in November, far exceeding economists' expectations of a gain of just 0.5%. More industrial production is a sign that the U.S. economy is strengthening and thus supportive of the stock market -- particular the Dow Jones, which includes a number of major industrial companies.
Twitter hit downgrades
Shares of Twitter tumbled more than 2% after analysts at both Wells Fargo and SunTrust Robinson Humphrey downgraded the stock. The firms had different reasons for downgrading Twitter.
SunTrust Robinson cited valuation. Even with Monday's pullback, shares of Twitter have risen more than 30% since its first day of trading; though analyst Robert Peck still likes the stock in the long run, he found finds its present valuation to be a bit excessive. Wells Fargo, on the other hand, was far more cautious, cutting Twitter to underperform and warning that investors seem to be overlooking a number of warning signs. In particular, Wells Fargo believes Twitter investors are not appreciating the risks inherent to Twitter's new products, including its attempts at capitalizing on TV.
iRobot rallying as Google takes interest
While Twitter was selling off, shares of iRobot were rallying nearly 3%. The company, which makes a number of consumer robot products, notably an autonomous vacuum cleaner, may have been benefiting from news of an acquisition.
Over the weekend, news broke that search giant Google acquired Boston Dynamics -- a robotics company that makes robots for the military. Although the product lines of Boston Dynamics and iRobot vary significantly, increased interest in the robot industry in general could be helping to support iRobot's shares.
Verizon said to be considering Internet TV bid
Verizon shares weren't up nearly as much as iRobot's, but investors were still enjoying a nice gain of more than 1%. Verizon may have just been trading higher in line with the broader market, but news of a forthcoming move into Internet-based TV could have helped support shares.
Over the weekend, The Wall Street Journal reported that Verizon could buy Intel's fledgling Internet TV operation for less than $200 million. Verizon was widely expected to buy the unit after the chip maker made it clear that it was no longer interested in the business, but some reports had put the figure closer to $500 million. While the deal wouldn't dramatically change Verizon's larger wireless business, it could help the company strengthen its push into paid-TV and Internet video content.
