Boeing loses value after Ethiopia crash

Tumbling shares in US aviation giant Boeing on Monday tore a hole in the Dow Jones Industrial Average, sending the benchmark index into the red for day.

About five minutes into the day’s trading, Boeing shares were down 11.7 percent at $373.23 following the most recent crash of one of its aircraft in Ethiopia.

The Dow fell 153.81 points to 25,319.42, but the broader S&P 500 rose 0.3 percent to 2,758.27 and the tech-heavy Nasdaq was up an even stronger 0.7 percent at 7,474.61.

The fatal crash of the Ethiopian Airlines Flight ET302 — the second involving a Boeing 737 Max 8 in five months — caused airlines in three countries to ground all flights involving the popular jet and cast fresh safety concerns on the airline. 

Shares in Southwest Airlines sank 2.12 percent while American Airlines lost 0.2 percent, United Continental gave up 0.8 percent.

Briefing.com analyst Patrick O’Hare said Boeing’s impact on the Dow 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 2.4 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.