Dow heavyweight Boeing ending strong decade with whimper

Dow heavyweight Boeing ending strong decade with whimper

Dow stalwart Boeing Co's shares have nearly erased their gains for 2019 as the plane maker grapples with the fallout from its sidelined 737 MAX jetliner.

The Boeing logo is displayed on a screen at the NYSE in New York
FILE PHOTO: The Boeing logo is displayed on a screen, at the New York Stock Exchange (NYSE) in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid

NEW YORK: Dow stalwart Boeing Co's shares have nearly erased their gains for 2019 as the plane maker grapples with the fallout from its sidelined 737 MAX jetliner.

Boeing shares fell as much as 2per cent on Tuesday after the company said it would suspend production of its best-selling 737 MAX in January, in the latest repercussions from two fatal crashes of the now-grounded aircraft.

The initial decline put the stock in slightly negative territory for 2019, but it was back to slightly positive for the year after rebounding during the session. That's still a huge underperformance compared to the S&P 500's 27per cent rise so far in 2019.

The stock has a particularly large influence on the Dow Jones Industrial Average , as it carries the most weight of the 30 stocks that make up the index. The Dow has underperformed the S&P this year, rising 21per cent.

Boeing shares have slid some 26per cent since hitting an all-time high of US$446.01 on March 1. Boeing and shares of key suppliers such as Spirit AeroSystems Holdings Inc have underperformed the S&P 500 since an Ethiopian Airlines 737 MAX crashed on March 10, the same Boeing model that crashed in Indonesia in October.

Graphic: Boeing, supplier shares since second 737 Max crash - https://fingfx.thomsonreuters.com/gfx/mkt/12/10109/10020/Pastedper cent20Image.jpg

Even with the lackluster performance of Boeing shares so far in 2019, the stock has had a strong decade.

Of the stocks currently in the 30-member Dow Jones Industrial Average , Boeing has rung up the fifth highest total return since 2010 began, rising over 658per cent during that time through Monday. UnitedHealth Group Inc and Apple Inc tallied the highest returns in the Dow, rising 1,009per cent and 968per cent, respectively.

Graphic: Top Dow performers for the decade - https://fingfx.thomsonreuters.com/gfx/editorcharts/BOEING-STOCKS/0H001QXQG9ZB/eikon.png

Because of Boeing's relatively high stock price, the stock has a particularly strong influence on the blue-chip Dow, which is weighted by stock prices, as opposed to the S&P 500, for which the companies with the largest market value carry the most sway.

Despite its recent swoon to US$329, Boeing shares carry the highest price in the Dow. As of Monday, Boeing's weight was about 7.9per cent of the index, followed by UnitedHealth with a weight of 7per cent. By contrast, Boeing's weight on the S&P 500 was only 0.66per cent, compared to about 4.5per cent for Apple.

Since the decade began, Boeing has contributed more points than any other component to the Dow's gain, according to Bespoke Investment Group. Over that time, Boeing accounted for 1,907.4 of the total 17,808 points gained by the Dow, or about 10.7per cent of the rise, according to Bespoke.

Despite the stock's recent swoon, Boeing remains the biggest industrial company by market value in the S&P 500. Its US$184 billion in market cap as of Monday was at least US$55 billion above the next biggest industrial sector companies, United Technologies Corp and Honeywell International Inc .

Graphic: Boeing market cap vs other industrial companies - https://fingfx.thomsonreuters.com/gfx/mkt/12/10108/10019/Pastedper cent20Image.jpg

(Reporting by Lewis Krauskopf; editing by Megan Davies and Jonathan Oatis)

Source: Reuters

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