After a tepid morning session, the Dow joined the broader U.S. stock market in positive territory Friday after Boeing Co (BA) snapped back to health on reports that the aerospace contractor was rolling out software fixes on its grounded 737 MAX series.
The Dow Jones Industrial Average surged more than 200 points in afternoon trading, mirroring a solid pre-market session for U.S. stock futures. The blue-chip index came within 73 points of 26,000 before giving back some of its gains. It was last up 178 points, or 0.7%, at 25,888.08.
Shares of Boeing Co (BA) snapped back to health and were on track for their biggest gain in over a month after it was reported that the airline manufacturer was planning to implement new security upgrades on its fleet of MAX 737s. Boeing is currently leading the Dow 30 index with gains of 2.5%.
The broad S&P 500 Index gained 0.7% to 2,826.65, where it traded at five-month highs. Nine of 11 primary sectors had reported gains, with information technology surging 1.6%.
The technology-focused Nasdaq Composite Index jumped 1% to 7,706.45.
A measure of implied volatility known as the CBOE VIX declined sharply on Friday and was on track to close at fresh five-month lows. The so-called “fear index” fell 6.2% to 12.67.
France’s AFP news agency reported Friday that Boeing is planning to implement new software upgrades to address safety issues linked to its 737 MAX jetliners.
The upgrades, which are scheduled to begin in ten days, will fix a bug associated with the airline’s automatic stall-prevention system. Aviation experts say this was the primary cause of the Lion Air crash in the Java Sea off the coast of Indonesia last October.
It’s not yet clear whether the same issue caused Sunday’s Ethiopian Airlines crash that killed 157 people shortly after takeoff in Addis Ababa. An investigation into the Ethiopian disaster is ongoing.
CCN.com reported Friday that the doomed Ethiopian flight was configured to dive after investigators examined the plane’s jackscrew.
Still, the U.S. stock market must grapple with disappointing manufacturing data.
A key measure of U.S. factory output rose less than expected last month, raising concerns that the prolonged trade war with China was hurting manufacturers.
The Federal Reserve reported Friday that industrial production, a broad measure of factory output at manufacturing facilities, mines, and utilities, rose just 0.1% in February. That followed a revised drop of 0.4% in January. Analysts in a median estimate had called for a February gain of 0.4%.
Capacity utilization, or the percentage of production facilities being put to use, edged down to 78.2% from 78.3%, official data showed.
Separately, the New York Fed reported a sharp downturn in its monthly manufacturing index. The Empire State manufacturing survey index fell to 3.7 in March from a reading of 8.8 in February. The March reading confounded expectations for a slight increase.
Last modified: July 2, 2020 8:14 PM UTC