Stocks opened mixed with the Dow down on a huge selloff in Boeing but then reversed and moved higher to close with a heavy volume gain of 200 points to 25,650. Tech stocks along with utilities and banks were higher.
The big news of the day here in Seattle was the grounding of all Boeing 737 Max 8 jets by China following the crash of a 737 shortly after takeoff from Addis Ababa in Ethiopia. This disaster appears similar to the Lion Air crash in Indonesia a few months ago and all parties are moving quickly to try and determine if they are related. 737 Max jets have been selling like hotcakes and Boeing has over 5,000 on order with 350 having been delivered so far mostly to China. Shares of Boeing were down hard at the open but rebounded during the day. We will see how this story develops but Boeing appears to be moving rapidly to find out what happened and come up with an explanation and possible solution. “Auguring in” is not a good thing.
Consolidation in the chip space continues as California based Nvidia agreed to purchase Israeli based Mellanox Technologies for $6.9 billion smackers. Nvidia beat out Intel in a bidding war for control of Mellanox which makes chips for servers and data centers. Nvidia CEO Jensen Huang said the move gives Nvidia a bigger role within the data center space which is being seen as a vital backbone for the digital age. There are two ways to view data centers one being called “east west” which is what happens within a data center between its servers and the other is what they call “north south” which is what happens outside the data center or between various data centers themselves. Instead of servers being the computer the entire data center is increasingly being seen as the computer and this acquisition helps Nvidia take a lead in that trend.