From CNBC:
Boeing shares tumble 9% after deadly crash of popular 737 jet
- Boeing shares fell more than 9 percent in premarket trading Monday.
- The move comes a day after an Ethiopian Airlines Boeing 737 MAX 8 crashed, killing 157 people.
- The plane is a Boeing best-seller, and China's aviation regulator decided to ask airlines to ground the planes.
Shares of Dow component Boeing retreated more than 9 percent in Monday's premarket, a day after a new Ethiopian Airlines Boeing 737 MAX 8 plane crashed shortly after takeoff, killing all 157 people on board and marking the second fatal crash of the manufacturer's best-selling aircraft in less than five months.We had a reason for posting March 4's "Boeing Has Accounted for ~1000 Points Of the Rise In the DJIA Since December".
China's civil aviation regulator on Monday told domestic airlines to ground the Boeing 737 MAX 8 jets, a move later echoed in Indonesia, a rare measure. Cayman Airways and Ethiopian Airlines said they, too, would take the planes out of service temporarily.
Ethiopian Airlines Flight 302 crashed shortly after takeoff for Nairobi from the Ethiopian capital Addis Ababa on Sunday. In a notice posted on its website, China's aviation regulator said the crash was similar to that of Lion Air Flight 610, another Boeing 737 MAX 8, which went down in the Java Sea in October, minutes after departing Jakarta....MORE
"Dow Hits 2-Week Lows As S&P Breaks Below Key Technical Support"
Did someone just pull a drain plug?
And re-referencing in March 7's "For Company and For Country: Boeing and US-China Relations (BA)"
Speaking of Boeing.*...It goes back to something we harp on any time we notice one of the Dow components having an inordinate effect on the action of the index. Here's the introduction to January 23's ""Dow Today Rallies 170 Points On Huge Moves By These 3 Stocks"":
*Nailed the March 1/March 4 top at $446/$444.50...
Back in the day the specialists on the exchange floor could (and did) manipulate DJ averages by showing strength (or weakness) in a handful of index components sufficient to balance an equal and opposite action in the rest of the index components moving in the direction the specialists eventually want the index to move. It was a masking technique....And an earlier example. On March 6, 2009, three days before the market bottomed, we posted "Manipulating the Dow Jones Industrial Average" which began:
Back in the bad old days, the specialists* in the Dirty Thirty would move their own books around to their personal benefit but from time to time would coordinate their efforts....MORE
The classic move would be to position for a decline while giving the impression to the investing public that "Hey, the water's fine, come on in".
They would do this by shorting the lower priced DJIA components while maintaining the higher priced stock, or even taking those up a bit.
When the trap was sprung, those higher priced stocks would be collapsed, triggering stop loss limit orders to feed the fear, and nary a specialist bid in sight. As the ticker spread the story to the country, the sell orders would come pouring in and accelerate the down move. Then the margin calls would go out, literally stripping stock from the accounts of the unwary.
This history came back to me as I watched IBM today. Big Blue is the highest priced stock in the DJIA. It was down $1.67 to $85.81. The current divisor is 0.1255527090 which means a $1.00 move in any component stock is worth just under 8 points on the index.
Thus a 1.16% move in IBM is worth as much to the index as a 97% move in Citi (closed at $1.03).
If these were the bad old days, and one were looking for the opposite move, up rather than down, then one would look for a way to paint a negative picture, perhaps by taking a high priced stock down while the lower priced issues were firming up.
That's how they used to do it in the old days*.
I'm pretty sure the exchange insiders did not cause the crash of an Ethiopian plane flying to Kenya but Boeing stock was set up to cause max effect to the index.
