Boeing stock falls sharply as crisis mounts over 737 MAX crashes
CNN/Stylemagazine.com Newswire | 3/11/2019, 11:58 a.m.
By Matt Egan, CNN Business
(CNN) -- The tragic Ethiopian Airlines crash on Sunday is raising doubts on Wall Street about Boeing.
Boeing's stock declined 7% on Monday afternoon in the aftermath of the second deadly crash of its bestselling 737 MAX 8 jet in five months. All 157 people on board the Ethiopian Airlines flight were killed when the plane fell out of the sky shortly after takeoff.
The sharp selloff is a sign that Boeing has a serious crisis on its hands. Almost three-quarters of Boeing's 2018 deliveries were 737 planes. And Boeing plans to build 59 new 737s each month in 2019.
The loss of life in the Sunday crash poses serious safety questions for Boeing and regulators investigating the incidents. China, Indonesia and several other airlines have already grounded the 737 MAX 8, raising the pressure on Boeing.
Boeing declined as much as 13.5% on Monday before recovering somewhat. If Boeing closes down more than 10.4%, it would be its worst day since September 17, 2001, the first day of trading following the 9/11 terror attacks.
The stock's decline on Monday played an outsized role dragging down the 30-stock Dow Jones Industrial Average. Boeing is the index's most expensive stock -- and the index is price-weighted.
The Ethiopian Airlines crash comes after a 737 MAX flown by Lion Air crashed off the coast of Indonesia in late October. All 189 passengers onboard the Lion Air flight died.
Boeing said in a statement on Sunday that it is "deeply saddened" by the crash and extends its "heartfelt sympathies to the families and loved ones of the passengers and crew on board." The company said a technical team will be at the crash site to provide assistance.
The Boeing selloff may be exaggerated by the fact that the stock had been vastly outperforming the broader market. As of Friday's close, Boeing was up 44% since Christmas Eve.
Southwest Airlines, which operates the largest fleet of 737 MAX 8 jets, fell 2% on Monday. The company said in a tweet that it remains "confident in the safety of our fleet," including its 34 Boeing 737 MAX 8 planes.
Boeing suppliers also retreated. Spirit AeroSystems lost 8%, while United Technologies dipped 1%.