Stock in commercial aerospace giant Boeing shares closed up 5.5% Monday afternoon, adding 64 points to the Dow Jones Industrial Average’s 358-point gain, making it the single largest contributor to the Dow Index.
The reason for Boeing’s gains in stock (ticker: ba), is certainly related to Kovid. The virus has dominated trading in commercial aerospace stocks for months.
The number of new Kovid-19 cases occurring daily in the US is decreasing. This is good news for the aerospace sector.
The second Monday data point comes from TSA. On Sunday, more than 830,000 passengers boarded the commercial jet. This is down from more than 2.6 million on the same day a year ago, but it is also the highest number of passengers passing through the TSA check point at US airports as the Kovid-19 has reduced demand for commercial air travel .
To go along with Boeing’s gains, US airline shares rose on average by about 7%. Boeing Peer Airbus (AIR.France) climbed 4% in overseas business. Aerospace supplier stockBaron’s Closes more than 4% of the tracks on average.
Kovid-19 is the industry’s biggest issue, openly, ever. For Boeing, Kovid remains a bigger deal for its shares than the 737 Max, which has been the cause of two fatal crashes within five months since March-March 2019.
Boeing had a market value of about $ 240 billion before the second Max crash. Its market value today is about $ 100 billion, which is about $ 294 billion less than the market capitalization of the average Dow Indicatals.
Nevertheless, Boeing can have a major impact on the index because the Dow price is weighted. For example, Boeing may be 1 / 20th the price of Apple (AAPL) in the market overall, but Boeing’s $ 179 stock price gives it 40% of the impact of Apple’s stock price at the Dow. Apple stock trades for around $ 450.
The Dow finished 1.3% on Monday, while the S&P 500 rose 0.3%. S&P is weighted by market capitalization. The Apple S & P 500 has the largest weight, which is about 7% of that market benchmark.
Write Al Root at [email protected]