Surging tech shares pulled the Dow and broader U.S. stock market out of a big hole on Monday, but a crisis-hit Boeing Co (BA) continues to struggle in the aftermath of a second deadly airline crash in five months.
Wall Street’s major bourses opened sharply lower on Monday, reflecting a brutal pre-market session for Dow futures. After plunging 242 points, the Dow Jones Industrial Average is now up 108 points, or 0.4%, at 25,558.96. Twenty-nine of 30 index members reported gains, with Apple Inc. (AAPL) climbing 3.2%. Shares of 3M Co (MMM) and DowDuPont (DWDP) each rose 2.4%.
The broad S&P 500 Index surged 1.1% to 2,774.21, with all 11 primary sectors reporting gains. Information technology shares rose 1.8% on average. The S&P 500’s energy component added 1.5%. Communications services and consumer stocks were also sharply higher.
Surging tech shares propelled the Nasdaq Composite Index to big gains. The technology-focused average rallied 1.6% to 7,526.88.
The CBOE Volatility Index, commonly known as the VIX, plunged 8.1% to 14.75. VIX trades on a mean-reverting scale of 1-100, with 20-25 representing the long-term average.
Stocks are bouncing back from a disappointing week that saw the Dow fall for five straight days. Global growth woes and mixed employment data were partly responsible for the downturn.
Shares of Boeing Co, a major Dow blue chip, plunged by as much as 9% in the aftermath of a tragic Ethiopian Airlines crash on Sunday. The Boeing 737 MAX 8 jet fell out of the sky shortly after takeoff in Addis Ababa, killing all 157 people on board. It was the second time in five months that a Boeing jet crashed, sparking serious safety concerns about the company’s airliners.
The company was in full-blown crisis mode on Monday after China and Indonesia said they were grounding all of Boeing’s MAX 8 jets. Both countries are among the biggest purchasers of the 737 MAX planes. According to The Wall Street Journal, Boeing has delivered 350 of the MAX planes as of January and has orders for about 5,000 more.
China’s Civil Aviation Administration broke from convention by ordering a full suspension of 737 MAX flights without first consulting with the country that certified the aircraft, in this case, the U.S. Federal Aviation Administration.
Indonesia was quick to follow China’s lead given the previous incident involving the 737 MAX airliner. Back in October, Indonesia’s Lion Air 737 MAX crashed in the Java Sea shortly after takeoff, killing 189 people. The plane suffered unreliable sensor information before plunging from the sky.
Last modified: July 2, 2020 8:14 PM UTC