Dow Recovers Early Losses After Boeing’s Ethiopia Crash
The benchmark Dow Jones Industrial Average was flat midmorning, recovering from steep early losses driven by tumbling shares in US aviation giant Boeing following Sunday’s fatal crash in Ethiopia.
Around 1430, Boeing shares were down 8.4 percent at $387.01, up from the steeper plunge before the market open following the fatal crash of the Ethiopian Airlines Flight ET302 — the second involving a Boeing 737 Max 8 in five months. But the Dow was down only a tenth of a percentage point at 25,425.91, recovering most the early plunge caused by Boeing. The manufacturer has a heavy weight in the benchmark index.
Meanwhile, the broader S&P 500 rose 0.8 percent to 2,764.48 and the tech-heavy Nasdaq gained more than 1.1 percent at 7,491.75. The crash in Ethiopia caused airlines in three countries to ground all flights involving the 737 Max 8 jet and cast fresh safety concerns on the aircraft — a mainstay of Boeing’s global sales.
Breaking: South Korea bans Boeing #737MAX from operating in its airspace pic.twitter.com/BhJHSq5rPR
— Alex Macheras (@AlexInAir) March 12, 2019
Shares in Southwest Airlines sank 0.9 percent and United Continental was down 0.2 percent but American Airlines from recovered earlier losses to post a 0.9 percent gain. Briefing.com analyst Patrick O’Hare said Boeing’s impact on the Dow — it accounted for about 11 percent of the index as of Friday — was not indicative of the performance of the wider market.
“The Dow Jones Industrial Average is a price-weighted average, and it just so happens that Boeing is its highest-priced component, which means it is going to have some outsized influence on its performance,” he wrote. Shares in iPhone maker Apple, which gained 2.8 percent, were likely to offset Boeing’s downward pressure after Bank of America analysts upgraded the company’s stock, O’Hare said.
The Commerce Department meanwhile reported US retail sales had recovered slightly after a dismal December.
Investors also likely were comforted by the latest public remarks from Federal Reserve Chairman Jerome Powell, who told the weekly television news broadcast 60 Minutes the central bank was likely to be patient before raising interest rates again.
