Stocks sold off thanks to a downturn in Boeing. At the close the Dow was down 83 points on lighter trading volume to close at 26,341. The NASDAQ was up 15 points as tech stocks continue to shine.
The Dow was pushed lower thanks to a selloff in Boeing which was lower after the company said it would cut 737 Max production by 19% from 52 planes per month to 42 so that they could focus on the software fix. Shares were downgraded by several gurus who basically said it will be longer to get the jets flying than original estimates. The 737 Max accounts for about 80% of orders and 1/3 of operating profits. There are 4,800 737 Max jets on order worth about $550 billion. The production slowdown will also have a as ripple effect as suppliers adapt. Both American Airlines and Southwest said they are extending the grounding of their 737 Max fleets. Southwest pushed its target date to fly the 737 Max out to June 7th.
An interesting deal developed betwixt Tesla and Fiat today when it was announced that Fiat would pay upwards of a billion dollars to Tesla in order to “pool cars” and avoid newly implemented emission fees put in place by the European Union. The scuttlebutt is that Fiat is paying Tesla hundreds of millions in order to avoid potential fines in the billions. While other car companies race to come up with electric vehicles Fiat has largely avoided going that route. Other car companies like Mazda and Toyota are also teaming up to avoid the new EU fines. I am not sure what all this means but it will be interesting to see how it develops.