Shares of commercial aerospace giant Boeing closed 5.5% higher on Monday afternoon, adding 64 points to the 358 point gain in the Dow Jones Industrial Average, making it the largest contributor to the index Dow.
The reason for the gain of the Boeing share (symbol: BA) is of course linked to Covid. The virus has dominated the commercial aerospace stock trade for months.
The second data point for Monday is from the TSA. More than 830,000 passengers boarded commercial jets on Sunday. That’s down from more than 2.6 million on the same day a year ago, but it’s also the highest number of passengers passing through TSA checkpoints at U.S. airports since Covid-19 decimated demand for commercial air travel.
To accompany Boeing’s gains, shares of U.S. airlines rose about 7% on average. Boeing, its Airbus counterpart (AIR.France), grew by 4% in international trade. Aerospace supplier inventoriesBarron’s runways close more than 4% more on average.
Covid-19 is the biggest problem the industry faces, frankly, ever. For Boeing, Covid remains a bigger deal for its actions than even the 737 MAX which has been grounded around the world since mid-March 2019 following two fatal crashes in less than five months.
Boeing, before MAX’s second crash, had a market value of around $ 240 billion. Its market value today is around $ 100 billion, well below Dow Industrials’ average market capitalization of around $ 294 billion.
Still, Boeing can have a big impact on the index because the Dow Jones is price-weighted. So, for example, Boeing might globally be worth 1 / 20th the value of Apple (AAPL) in the market, but Boeing’s stock price at $ 179 gives it 40% of the impact of the stock price. Apple’s share in the Dow. Apple shares are trading around $ 450.
The Dow Jones ended up 1.3% on Monday, while the S&P 500 was up 0.3%. The S&P is weighted by market capitalization. Apple is the biggest weight in the S&P 500, accounting for around 7% of this market benchmark.
Write to Al Root at [email protected]