Dow sinks 250 points as Boeing’s stock tanks
The Dow dropped some 250 points Friday, following a sharp drop in Boeing’s shares.
Shares of Boeing, which has been hurt by the grounding of its bestselling 737 Max jet, dropped after the FAA and U.S. Department of Transportation said they are investigating whether the aircraft maker withheld information during the 737 Max’s certification process.
Boeing shares closed down 6.8%. Boeing is the most heavily weighted stock on the price-weighted Dow, and that exacerbated its losses. The aircraft manufacturer alone shaved more than 25 points off the index.
Johnson & Johnson stock took a drubbing after asbestos was found in some of the company’s baby powder. Its shares dropped 6.2%, taking 8.5 points off the Dow.
The index closed nearly 1%, or 256 points, lower on Friday. For the week, the Dow fell 0.2%.
The broader S&P 500 finished down 0.4%, and the tech-heavy Nasdaq Composite fell 0.8%. They both finished the week in the green.
China’s slowing growth
Stocks had been weaker to start with on Friday. Further evidence that the Chinese economy is slowing left a bad taste in investors’ mouths. That weighed on global equities. The pace of growth in the world’s second largest economy slowed to its lowest rate since 1992.
Asian and European exchanges closed lower. Things didn’t look much better in the United States.
A slowdown in China, one of the world’s primary growth engines, doesn’t bode well for the global economy. At the same time, China’s economic expansion has been steadily losing steam for years, as the country is turning from an export-driven developing economy into a more consumer-focused one. That means Friday’s GDP number wasn’t all that surprising.
Technology stocks were faring particularly poorly on Friday, because many American tech companies rely on China’s rapidly expanding middle class for their profit and sales growth.
Still, Friday’s selloff pales in comparison to some days dominated by trade headlines.
Trade has been the main driver of the market for months. And after the United States and China agreed a first phase of a trade deal last week, some of the uncertainty has been removed. Of course, the deal isn’t signed yet, but after months of stock market rallies and selloffs, the preliminary agreement provides an inkling of stability.
