Stocks traded mixed on Monday, with the Dow Jones falling as Boeing ( BA ) shares sold off and uncertainty over the prospects of interest rate cuts continuing to weigh on markets.
The Dow Jones Industrial Average (^DJI) fell about 0.4%, or 170 points. The S&P 500 (^GSPC) rose 0.2%, and the tech-heavy Nasdaq (^IXIC) rose 0.5%, after all three major stock indexes broke a nine-week winning streak on Friday.
Shares of Boeing, a component of Dow Jones, fell by as much as 9% after US authorities grounded some 737 MAX 9 planes following the explosion of the plane's fuselage in the air. The accident affected other stocks, as shares of Max 9 aircraft operators Alaska Airlines (ALK) and United Airlines (UAL), which operates the plane, fell. Shares of fuselage maker Spirit AeroSystems (SPR) fell more than 10%.
Overall, investors are moving cautiously after stocks were bruised in the early days of 2024 thanks to waning expectations for an early rate cut from the Federal Reserve. Strong labor market data, including a better-than-expected December jobs report, has intensified debate over the Fed's policy path.
Read more: What a pause on federal interest rate hikes means for bank accounts, CDs, loans and credit cards
This week could bring a catalyst to the market, with major bank earnings reports and an important reading on future inflation. The CPI reading is due on Thursday, while JPMorgan (JPM), Wells Fargo (WFC), and Bank of America (BAC) will kick off their fourth-quarter earnings season.
One risk is likely off the table after congressional leaders said Sunday they had reached a $1.59 trillion spending deal aimed at averting an impending government shutdown. The yield on the benchmark 10-year Treasury note (^TNX) stuck above 4% after last week's gains.
Meanwhile, oil prices fell more than 4% as investors digested Saudi Arabia's decision to reduce key prices for crude supplies to all regions, including its main market in Asia.
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Boeing collapses after the grounding of the 737 Max planes
Boeing (BA) stock fell as much as 8% early Monday after an incident on board an Alaska Airlines (ALK) plane late Friday led to the FAA grounding some of the company's 737 MAX 9 planes. During the weekend.
Shares of Spirit AeroSystems (SPR), which makes the fuselage, were also down more than 13% at the open.
According to data from Yahoo Finance's Jared Blecker, Boeing's gap in the open market was the worst since May 2022.
As Yahoo Finance's Josh Schaefer reported, Wall Street analysts view this news as a challenge for Boeing in the short term, but not something that changes the long-term story for the industrial giant.
“Our view remains that Boeing's primary mission over the next two years is to ramp up production and deliveries of the 737 and 787…The 737 MAX 9 accident on Friday was clearly not helpful,” JPMorgan's Seth Sifman wrote in a client note. In this regard, the extent of the setback is not yet clear, with a number of possible outcomes.”
“With the limited information we have at this early stage, this appears to represent a manufacturing quality escape rather than a design issue,” Ron Epstein, an analyst at Bank of America Global Research, wrote on Monday.
Epstein maintained a buy rating on the stock and maintained a $275 price target for Boeing.
In this photo released by the National Transportation Safety Board, John Lovell, NTSB investigator in charge, inspects the fuselage connection area of Alaska Airlines Flight 1282 on Sunday, Jan. 7, 2024, in Portland, Oregon. (National Transportation Safety Board via AP) (News agency) -
Stocks opened mixed after snapping a 9-week winning streak
Stocks opened mixed on Monday after ending a 9-week winning streak last week.
The Dow Jones Industrial Average (^DJI) fell 0.4%, or 150 points, while the S&P 500 (^GSPC) rose 0.2%. The tech-heavy Nasdaq (^IXIC) rose 0.4%.
Hotter-than-expected jobs data last week raised investors' questions about when the Federal Reserve might start cutting interest rates this year.
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