The Dow Jones Industrial Average (DJINDICES:^DJI) had risen nearly 20 points as of 11:30 a.m. EDT. AT&T (NYSE:T) was down 1.2% as one of the index's worst-performing stocks, while DIRECTV (NASDAQ:DTV) was just under breakeven and Zynga (NASDAQ:ZNGA) shares were moving to the upside.
Retail sales miss
Retail sales, a measure of consumer activity, came in short of expectations for April. Economists had expected a gain of 0.4% -- but the Census Bureau said sales rose only 0.1% on a month-over-month basis. Core retail sales, a measure that excludes automobiles, did not rise at all; economists had anticipated a gain of 0.6%.
Although retail sales aren't the most important measure of economic activity, disappointing data does suggest that the U.S. consumer may not be as confident and as able to spend as otherwise anticipated.
AT&T said to be closing in on bid for DIRECTV
Wireless giant AT&T is in late-stage talks to acquire DIRECTV, according to Bloomberg. The telecom is said be considering a bid of about $50 billion for the satellite TV provider, which would then be run as a separate unit within the larger AT&T organization.
AT&T shares were falling on the buyout reports, as investors may wonder whether acquiring DIRECTV is a prudent use of capital. DIRECTV shares were also down slightly, though shareholders could receive a solid windfall in the event of an acquisition. That gain, however, may appear relatively tame as the possibility of a takeover has been floating around the market for some time.
Adding DIRECTV's pay-TV operations would enable AT&T to offer a wider bundle of services -- not just wireless phone service, but also pay TV and Internet. AT&T's U-verse operation provides pay TV, but has just over 11 million subscribers -- DIRECTV, in contrast, has slightly more than 20 million subscribers.
That large base of subscribers could give AT&T leverage in its negotiations with content companies, as content costs have grown tremendously in recent years. This trend has been industry-wide, and may be the primary motivation behind similar mergers in the sector.
Zynga launches slot machine game on Android
Shares of social game developer Zynga were up 4% on Tuesday, one day after the company said it would bring Hit It Rich! to Android.
Hit It Rich! is a virtual casino game that allows players to interact with a wide variety of virtual slot machines on their smartphones and tablets. The game has already seen some success on the iOS platform; bringing it to Android, the most popular mobile operating system in the world, could expand Zynga's base of players, and by extension, its customers.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends DirecTV. 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.