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Boeing drags down the Dow on speculation China could single it out in trade war

Author:
Valentin Lazarov
Investors

Boeing shares fell nearly 5% in trading Monday as the trade war intensifying between the U.S. and China put added pressure on the aircraft maker.

The aerospace giant’s stock was responsible for 117 points of the Dow Jones industrial average’s over 600 point drop, making Boeing the largest single contributor to the Dow’s decline among the 30 companies of the index.

Boeing’s fall is “definitely a response to the China trade” dispute, Jefferies analyst Sheila Kahyaoglu told CNBC.

Most of the stock’s drop came after the editor of Chinese newspaper Global Times speculated that the country may single out the aircraft maker in the trade war.

China may “reduce Boeing orders” as one of its retaliatory tactics in the trade war, Hu Xijin, editor-in-chief of the Global Times, said in a tweet. The Global Times is a state-affiliated organization, with close connections to the government. The outlet tends to be more outspoken in contrast to other state media.

With more than 4,000 on order, the 737 Max aircraft makes up the majority of Boeing’s backlog of over 5,600 aircraft orders.

China has been working on working on its own aircraft to compete with Boeing and Airbus, called the C919, but the program is far behind schedule. Jefferies estimates the first C919 aircraft will not be delivered to a customer until 2021.

Source:CNBC

 

 

International Financial Markets Department

Euro-Finance Ltd.

forex@eurofinance.bg

www.eurofinance.bg 

*This material should not be considered as a recommendation for buying/selling securities.