Boeing Co shares fell by the most in three years on Monday after China, Indonesi...
- Boeing Co shares fell by the most in three years on Monday after China, Indonesia and Ethiopia ordered airlines to ground their 737 MAX 8 planes following the second deadly crash of one of the jets in just five months.
A Nairobi-bound Boeing 737 MAX 8 operated by Ethiopian Airlines crashed minutes after takeoff from the country’s capital Addis Ababa on Sunday, killing all 157 on board. The same model, flown by Lion Air, crashed off the coast of Indonesia in October, killing all 189 on board. Indeed, many investors saw the initial drop in Boeing stock as an opportunity to pick up the shares at a sudden discount. After dropping by as much as 13.5 percent in the first 10 minutes of trading on Monday morning, by late morning they had recouped roughly half the loss and were down just 6.7 percent.Spreads on Boeing’s bonds, a measure of the added compensation investors demand for owning its debt, were also wider, data from Refinitiv showed.
Wall Street has been overwhelmingly bullish on Boeing - 19 of the 24 brokerages covering the stock rate it “buy” or higher, while five have a “hold” rating. No brokerage has had a sell rating on the stock since July 2017. Investigators have found the black box from the fatal crash with both the cockpit voice recorder and digital flight data, Ethiopian state TV reported on Monday, which should shed light on the cause of the crash.
Shares of Dallas-based Southwest Airlines Co - the biggest operator of the MAX 8 - fell 1.3 percent, while American Airlines Group Inc, which has 24 MAX 8 jets, was up 0.4 percent.
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Southwest says it remains 'confident' in its fleet of Boeing planes after Ethiopia crashSouthwest Airlines Co. expressed confidence in its Boeing Co. aircraft and said has no plans to change operations in the wake of a deadly crash involving a 737 Max 8 aircraft in Ethiopia. But shares of the airline fell over 3% in premarket trading, alongside a nearly 9% drop in Boeing shares. "As Southwest operates a fleet of 34 Boeing 737 MAX 8 aircraft, we have been in contact with Boeing and will continue to stay close to the investigation as it progresses," said a spokesman for the company. Ethiopian Airlines Flight 302 crashed shortly after takeoff from the capitol of Addis Ababa, killing all 157 people on board. It's the second deadly accident involving Boeing's popular 737 Max 8 in six months, with the last occurring in October when an Indonesia Lion Air jet crashed into the sea, killing all 189 on board. China's civilian aviation authority has ordered all airlines to ground those Max 8 planes, while Ethiopian Airlines has grounded its entire fleet of those planes. "We don't have any changes planned to our operational policies or procedures," said the Southwest spokesman. Losses for Boeing drove a 170-point drop in Dow futures.
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Indonesia Follows China in Grounding Boeing 737 MAX 8 Jets After Fatal CrashIn a break with traditional air-safety practice, Indonesia joined China in grounding Boeing 737 MAX 8 aircraft following the deadly crash of an Ethiopian Airlines jet of the same type, sending Boeing shares down almost 9% in premarket trading.
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