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Dow Suffers Whiplash after Ethiopian Airlines Drops Boeing Bombshell

Last Updated September 23, 2020 12:37 PM
Sam Bourgi
Last Updated September 23, 2020 12:37 PM

The Dow lagged the broader U.S. stock market for most of the session on Wednesday, as Boeing shares resumed their slide after preliminary findings of the Ethiopian Airlines crash revealed that the pilot followed the manufacturer’s emergency procedures – a stark contradiction to Boeing’s earlier claims.

Dow Plays Catch Up to S&P 500, Nasdaq Boom

The Dow Jones Industrial Average edged up 39.00 points, or 0.2%, to finish at 26,218.13. Earlier in the day, the blue-chip index had gained as much as 103 points, reflecting a strong pre-market for U.S. stock futures.

Dow Jones Industrial Average weighed down by Boeing shares. | Chart via Yahoo Finance.

Wall Street’s other major indexes edged closer to record highs on Wednesday. The S&P 500 Index climbed 0.2% to 2,873.40, with five of 11 primary sectors reporting gains. Materials stocks saw the biggest gains, rising 1.3% as a collective. Technology stocks rose 0.8% as a whole.

The technology-focused Nasdaq Composite Index jumped 0.6% to 7,895.55.

The CBOE Volatility Index, also known as the VIX, moved in the same direction as stocks. VIX climbed by as much as 6.8% before giving up some of its gains. By the close, it was trading at 13.75.

Boeing Woes Continue to Roil Dow

boeing, dow
Boeing shares under pressure after preliminary report contradicts the company’s safety assessment. | Source: Shutterstock

Shares of Boeing Co (BA) fell 1.5% after a preliminary report showed that the pilots manning doomed Ethiopian Airlines Flight 302 initially followed the manufacturer’s emergency procedures. The findings raised renewed concerns about the safety of Boeing’s MAX 737 airplanes, which have been grounded in more than two dozen countries. It has also called into question Boeing’s assertion that the disaster could have been avoided if the pilots simply followed established procedures.

The airplane plunged from the sky shortly after take-off outside of Addis Ababa on March 10, killing all 157 people on board.

Neither Boeing nor the Federal Aviation Administration (FAA) has confirmed the report, which was initially published by The Wall Street Journal . A Boeing spokesman did issue the following statement:

“We urge caution against speculating and drawing conclusions on the findings prior to the release of the flight data and the preliminary report.”

Boeing’s stock was recovering for the better part of two weeks after the aircraft manufacturer announced that a new software fix on its 737 MAX fleet would soon be implemented. The stock plummeted nearly 18% between March 1 and March 22.