THE DECLINE OF BOEING’S STOCK IS CAUSING PROBLEMS FOR THE DOW

Boeing’s shares tumble

Boeing’s stock continues to decline, causing turmoil in the 30-stock Dow index, in which it is a major component. The stock of the famous airline lost major ground on Monday declining from $422.54 on Friday to around $370 today. This downward slide was prompted by the recent Ethiopian airlines accident which involved a Boeing 737 Max 8 aircraft and killed around 149 passengers and 7 crew members that were on board.

Boeing (BA) Stock Price Today

Concerns about safety are bearish for the Aircraft giant

This is the second accident that involved a Boeing 737 max in a period of six months. Aviation experts say that the Maneuvering Characteristics Augmentation system may have been the culprit. The decline in the stock price affected many airlines, especially those operating Being’s 737 Max 8 aircraft, which is quite popular. And financial analysts say that the 30-stock dow index will be heavily affected.

Boeing has a bigger weight in the 30-stock Dow

The 30-stock dow index is priced-weighted, which means that stocks with higher price affect the movement of the index more heavily, and the recent tumble in Being’s stocks could alone lead to a decline of more than 200 points in the index, since it is an expensive stock. Analysts say that while investors may be conservative regarding the stock in the short term, the problems should be resolved in the long term.

American equities are bullish, except for the Dow

This effect has already been evident in the Dow futures. In the overall, American equity futures represented by the S&P 500 and the Nasdaq futures were bullish today, whereas the Dow Jones Industrial average saw a decline. The decline in Boeing’s stock is likely the cause of this decline, since other indices are positive, and investors’ sentiment is bullish in the overall.

TSRadmin

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