Dow Staves Off Boeing-Inspired Chaos to Snap Five-Day Losing Streak
The Dow and broader U.S. stock market overcame a volatile open to finish sharply higher on Monday, as surging tech shares overshadowed a chaotic session for Boeing in the wake of another deadly crash involving its MAX 8 jet.
Dow Overcomes Early Volatility; S&P 500, Nasdaq Follow
All of Wall Street’s benchmark indexes overcame a volatile open to finish sharply higher. After plunging more than 200 points after the open, the Dow Jones Industrial Average would go on to climb 200.64 points, or 0.8%, to 25,650.88. Apple Inc. (AAPL) was the biggest gainer, climbing 3.5%.
The broad S&P 500 Index of large-cap stocks gained 1.5% to close at 2,783.30. All 11 primary sectors recorded gains, with information technology surging 2.1%. Shares of energy companies rose 1.5% on average. Communication services tacked on 1.8%.
The technology-focused Nasdaq Composite Index surged 2% to 7,558.06.
Boeing Controversy Builds
Shares of Boeing Co (BA) plunged by as much as 13.5% after China and Indonesia grounded all MAX 8 jetliners following the Ethiopian Airlines crash on Sunday. The Boeing plane fell out of the sky shortly after takeoff in Addis Ababa, killing 157 people on board. It was the second time in five months that a Boeing MAX 8 plunged from the sky. In October, Indonesia’s Lion Air 737 MAX crashed in the Java Sea, killing 189 people.
Boeing said it is “deeply saddened” by the crash and that it extends its “heartfelt sympathies to the families and loved ones of the passengers and crew on board.”
As CCN reported earlier, China’s Civil Aviation Administration ordered a complete suspension of Boeing 737 flights without consulting with the country that certified the jetliner, in this case the U.S. Federal Aviation Administration. Typically, Chinese officials will consult with the issuing country’s regulator before grounding flights.
Boeing is facing a major crisis as concerns over aircraft safety continue to grow. In 2018, nearly three-quarters of the company’s deliveries were 737 planes. It has an additional 5,000 units on back order.
U.S. Retail Spending Rebounds but Grim Outlook Remains
U.S. retail sales rose unexpectedly in January, but concerns over consumer spending remained in focus after the December figure was revised sharply lower.
Receipts at retail stores climbed 0.2% in January versus forecasts calling for no change, the Department of Commerce reported Monday. December sales, already surprisingly weak, were revised down to reflect a 1.6% drop. They were initially reported as a 1.2% shortfall.
Excluding automobiles, gasoline, building materials and food services, receipts rose 1.1% in January after falling 2.3% the month before.
December typically represents the height of consumer spending season as Americans flood shopping malls for Christmas. The soft reading suggests that consumer spending could be heading for a soft landing, which is an ominous sign for the economy as a whole.
On Friday, the Labor Department said nonfarm payrolls rose by just 20,000 in February, vastly undershooting forecasts of 180,000. However, the unemployment rate ticked down to 3.8% from 4% and average hourly earnings rose 3.4% annually. Both figures were higher than expected.
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