Boeing Keeps Dow in Positive Territory as Stock Market Slides
The Dow clung to gains thanks to a boost from Boeing, enabling it to resist the stock market's overall decline. | Source: AP Photo / Richard Drew
The Dow outperformed the broader U.S. stock market Friday thanks to strong performances from Boeing Co (NYSE:BA) and Microsoft Corp (NASDAQ:MSFT).
Dow Hangs Onto Narrow Gains; S&P 500, Nasdaq Drift Lower
The U.S. stock market turned lower in afternoon trading, diverging sharply from a positive pre-market for Dow futures. The S&P 500 Index fell 0.2% to 2,989.05, with utilities and communication services among the worst performers. The technology-focused Nasdaq Composite Index declined 0.3% to 8,185.06.
The Dow Jones Industrial Average pared most of its gains and was last up 25.46 points, or 0.1%, at 27,248.23.
Shares of Microsoft surged to record highs after the software giant reported better than expected earnings and revenue Thursday evening. The company’s intelligent cloud segment, which includes Azure, posted annual revenue growth of 64% in the fiscal fourth quarter.
Boeing to Compensate Airlines for 737 Debacle
Shares of Boeing – the Dow’s largest component – surged Friday after the aerospace contractor said it would pay $5 billion in after-tax charges to compensate airline customers for the 737 MAX debacle. The announcement was also geared toward investors, who are looking ahead to Boeing’s earnings call next Wednesday.
“For purposes of the second-quarter financial results, the company has assumed that regulatory approval of 737 MAX return to service in the U.S. and other jurisdictions begins early in the fourth quarter 2019,” the company said in a news release.
It has been a disastrous 2019 for Boeing after a MAX 737 jetliner plunged from the sky off the coast of Addis Ababa, Ethiopia back in March, killing all 157 people on board. It was the second deadly incident in five months involving the aircraft, prompting global aviation authorities to ground all 737 flights.
The 737 was Boeing’s best-selling aircraft, and the company has been scrambling to resolve a series of software glitches preventing the fleet from returning to the sky. A total of 387 MAX planes have been grounded – and even more that haven’t been delivered, according to Barron’s . The $5 billion charge Boeing will pay equates to roughly $12 million per delivered plane in airline benefits.
Boeing shares rose nearly 5% on Friday, reaching their highest level in over two months.
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