An earlier version of this article incorrectly spelled the name of the chief executive officer of Boeing Co., Dennis Muilenburg. The error has been corrected.
Reuters
A Boeing 737-800 aircraft of Air China sits on the tarmac at an airport in Beijing.
The Dow Jones Industrial Average fell at the start of trade Monday, with Boeing Co. shares weighing on the blue-chip index after a second deadly crash in about six months involving its 737 Max 8 aircraft.
How are major indexes faring?
The Dow Jones Industrial Average DJIA, -0.21% slid 140 points, or 0.6%, to 25,304, while the S&P 500 index SPX, +0.50% was up 14 points, or 0.5%, at 2,757. The Nasdaq Composite Index COMP, +0.94% rose 65 points, or 0.9%, to 7,473.
What’s driving the market?
Shares of the Boeing BA, -8.50% the Dow’s most heavily weighted company, fell more than 11% Monday morning, after one of the company’s 737 Max 8 planes operated by Ethiopian Airlines crashed shortly after take off from the capital of Addis Ababa on Sunday, leaving no survivors among the 157 on board.
It comes months after a crash of the same model plane flown by Indonesia’s Lion Air, which went down into the Java Sea shortly after takeoff, killing 189 persons. The plane maker released a statement expressing sympathy for the families of the victims, and said it would be sending a technical team to assist.
Investigators will be looking at the two separate crashes — both took place as the aircraft were taking off. The pilot of the Ethiopian flight was trying to return to the airport after reporting technical problems, and the weather was clear. China has grounded all 96 of its 737 Max 8 planes, and Ethiopia Airlines has also reportedly done the same.
Boeing has delivered about 350 of its best-selling 737 Max planes, with orders for more than 5,000, and the plane already in use by American Airlines Group Inc. AAL, +0.78% United Continental Holdings UAL, -0.12% and Southwest Airlines Co. LUV, -1.49%
Southwest said it was in close contact with Boeing following the crash, but expressed confidence those planes and said it had no plans to change operations. Still, shares of Southwest fell over 3% in premarket trading.
Last week, Boeing Chief Executive Officer Dennis Muilenburg told an aviation conference that purchases of his company’s planes by China could be part of a trade deal being hammered out by the two countries, Reuters reported. U.S. and Chinese officials have cited progress for those trade talks, but investors are still waiting for news of hard details or a concrete deal.
What could be a shaky start for the Dow comes on the heels of a tough week for investors, as concerns about a global slowdown coincided with the 10th anniversary of the bull market on Saturday. Investors were caught off guard by a surprisingly weak jobs number after the Labor Department announced the U.S. economy added just 20,000 new jobs in February, well below the 178,000 forecast by economists in a MarketWatch poll.
Read: On bull market’s 10th anniversary, can stock investors shrug off latest gloom?
Federal Reserve Chairman Jerome Powell played down worries over the economy in an interview with “60 Minutes” on Sunday, saying “there is no reason why this economy cannot continue to expand.”
What are analysts saying?
“The 1.1% m/m rebound in underlying control group retail sales in January may provide some reassurance that consumer spending isn’t falling off a cliff,” wrote Andrew Hunter, senior US economist with Capital Economics, in a Monday research note.
“But with December’s reading revised down to show an even sharper 2.3% plunge, the data confirm that real consumption growth is on course to slow sharply in the first quarter,” he added.
“Boeing stocks and more broadly airline stock will be in focus after the second deadly crash for Boeing’s new 737 Max 8 in just six months,” said Jasper Lawler, head of research at London Capital Group, in a note to clients. “This tragic incident will be a massive hurdle for Boeing to overcome.”
What stocks are in focus?
Shares of Tesla Inc. TSLA, +0.01% were trading 0.8% lower Monday morning after the electric-car maker reversed a decision to close most of its physical shares and move to online sales, and cut prices of the autos by 6%. Tesla said in a blog post that it will close half as many stores, which means the price savings for customers will also be about half. The company said there would be no increase to the $35,000 Model 3.
Nvidia Corp. NVDA, +2.74% stock rose 0.4% early Monday, after the chip maker said it reached an agreement to acquire Israeli server and storage company Mellanox Technologies Ltd. MLNX, +8.39% in a deal with an enterprise value of $6.9 billion.
Shares of Apple Inc. AAPL, +2.69% rose 1.8%, after Bank of America Corp. BAC, +0.63% upgraded the stock to buy from neutral on Monday.
Ross Stores Inc. ROST, +0.77% stock is in focus Monday, after the discount retail announced plans Monday to open 100 new locations in 2019. Shares rose 0.6%.
What economic data are in focus?
Retail sales rose 0.2% in January, above the 0.1% increase predicted by economists polled by MarketWatch. More disappointing, December’s 1.2% drop was revised even lower to a 1.6% decline, marking the largest fall in nearly 10 years.
If auto and gasoline are omitted, sales rose a healthier 1.2% month-over-month, following a revised 2.3% decrease in December.
The Commerce Department will also issue a report on business inventories at 10 a.m.
At 11 a.m., the Federal Reserve will issue a report on consumer expectations.
How did the benchmarks end last week?
Major indexes extended their losing streak to five days on Friday, with the Dow bouncing off intraday lows to end down 22.99 points, or 0.1%, at 25,450.24. The S&P 500 index shed 0.2%, to 2,743.07, its worst string of losses since November, and the Nasdaq Composite Index dropped or 0.2%, to 7,408.14, marking its weakest stretch since April.
For the week, both the Dow and the S&P 500 fell 2.2% and the Nasdaq declined 2.5%.
How are other markets trading?
Asian stocks had a mostly positive session, with the Shanghai Composite SHCOMP, -2.56% climbing 1.9%.
European stocks were trading higher midday Monday, with the Stoxx Europe 600 index SXXP, -0.47% rising 0.2%.
The ICE Dollar Index DXY, -0.13% was flat, while gold prices GCJ9, -0.31% slipped 0.2% to $1,296.60 an ounce, and oil CLJ9, +1.32% prices rose, with a gain of 0.5%.
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