The Dow lagged behind its stock market peers on Tuesday as Boeing shares continued to plunge in the wake of another deadly airline crash involving a 737 MAX 8 jetliner. Meanwhile, a weaker than expected reading of the February consumer price index (CPI) suggests the…
The Dow lagged behind its stock market peers on Tuesday as Boeing shares continued to plunge in the wake of another deadly airline crash involving a 737 MAX 8 jetliner. Meanwhile, a weaker than expected reading of the February consumer price index (CPI) suggests the Federal Reserve has plenty of scope to keep interest rates on hold for longer.
Unlike its major peers on Wall Street, the Dow Jones Industrial Average declined on Tuesday, reflecting tepid pre-market conditions for Dow futures. The 30-stock index fell 102.69 points, or 0.4%, to 25,548.19.
The broad S&P 500 Index of large-cap stocks gained 0.3% to 2,792.86, where it was approaching a critical resistance test tracking near 2,800. Eight of 11 primary sectors recorded gains, with energy shares climbing 0.9%. Communication services, information technology, and materials also outperformed the index.
The technology-focused Nasdaq Composite Index climbed 0.3% to 7,583.66.
On Monday, stocks recorded their largest advance since January 30, capping off a wild session that initially began with a triple-digit retreat for the Dow.
Shares of Boeing Co (BA), the Dow’s biggest component by weight, plunged anew on Tuesday as the company grappled with an emerging crisis over its 737 MAX 8 airliners. On Sunday, a Boeing jet fell from the sky shortly after takeoff in Addis Ababa, Ethiopia, killing all 157 people on board. It was the second Boeing disaster in the last five months, prompting governments across the world to suspend all 737 MAX 8 flights.
In October, a Lion Air flight carrying 189 people crashed in the Java Sea, killing 189 people. Boeing and the U.S. Federal Aviation Administration said they were implementing a software upgrade to an automatic flight-control system that was suspected of misfiring in the accident.
As of January, Boeing had delivered 350 737 MAX 8 jets, according to The Wall Street Journal. Another 5,000 units are coming down the production pipeline.
U.S. consumer prices grew in February for the first time in four months, though the annual rate of inflation fell further below the Federal Reserve’s coveted 2% target, giving policymakers even more scope to hold off on additional interest rate hikes.
The consumer price index (CPI) of goods and services rose 0.2% in February, lifted by higher costs for food, gasoline, and rent, the Labor Department reported Tuesday. That translated into a year-over-year gain of 1.5%, the smallest in nearly two-and-a-half years.
So-called core inflation, a measure that strips away volatile food and gasoline costs, edged up 0.1% for the month and 2.1% annually, official data showed.
The Fed, which targets inflation at 2%, relies on the core personal consumption expenditure (PCE) index to measure cost pressure. But even that indicator has shown signs of stagnation, having recently dropped to 1.9% annually in December. The core PCE index hit the central bank’s target in March of last year for the first time since 2012 but has since declined.
Last modified: January 10, 2020 7:08 PM UTC