Boeing shares tumble as Trump grounds 737 MAX planes
Wednesday March 13 2019
A worker is pictured next to a Boeing 737 MAX 9 airplane on the tarmac at the Boeing Renton Factory in Renton, Washington, on March 12, 2019. PHOTO | JASON REDMOND | AFP
Shares in US aviation giant Boeing fell precipitously on Wednesday, dragging the Dow Jones Industrial Average lower moments after President Donald Trump announced the grounding of top-selling aircraft.
It was an erratic day as Boeing shares recovered early in the session, but lost nearly three percent after Trump's announcement, before regaining some ground. It was down 1.2 percent just after 1900 GMT at $371.20 (Ksh37,194.24).
The stock is now down more than 12 percent since before Sunday's crash of an Ethiopian Airlines flight, and wiping billions off the company's market value.
The benchmark Dow, which is heavily weighted to Boeing's shares, fell about 100 points, but then bounced back to show a 0.3 percent gain.
Meanwhile the broader S&P 500 held on to earlier winnings, putting it up 0.7 percent at 2,811.89 and the tech-heavy Nasdaq was even higher at 7,651.91.
Trump's announcement came hours after a similar decision by Canadian authorities and made the United States among the last nations in the world to take action to ban the planes.
Sunday's crash of Ethiopian Airlines Flight ET302 was the second in less than five months for the 737 MAX 8, bearing eerie similarities to October's fatal Lion Air crash in Indonesia.
Anonymous reports by US pilots also showed incidents in which flight systems suddenly and inexplicably caused the aircraft to pitch downward.
Boeing said Wednesday it maintains total confidence in its 737 MAX aircraft, but nevertheless supports the decision to ground the planes.
Boeing CEO Dennis Muilenburg said the company continues its efforts "to understand the cause of the accidents in partnership with the investigators, deploy safety enhancements and help ensure this does not happen again".