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Shares in commercial airline Boeing shares were up 5% Monday afternoon, adding 57 points to the Dow Jones Industrial Average’s 330 points gain, making it the largest single participant in the Dow index.
The reason for this is the Boeing stock market (ticker: BA) is obviously Covid-related. The virus has dominated commercial aviation trade for months.
The number of new Covid-19 cases diagnosed daily in America is trending lower. That’s the first bit of good news for the aviation sector.
Monday’s second point comes from the TSA. More than 830,000 passengers boarded commercial jets Sunday. That 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 TSA checkpoints at U.S. airports since Covid-19 reduced the demand for commercial air travel.
To keep up with Boeing’s gains, US airline shares averaged about 5.6%. Boeing peer Airbus (AIR.France) increased 4% in overseas trade. Aerospace supplier sharesBarron’s tracks were on average about 4% up.
Covid-19 is the biggest problem facing the sector, honestly, ever. For Boeing, Covid remains a bigger deal for its shares than even the 737 MAX, which has been grounded worldwide since mid-March 2019 after two fatal crashes within five months.
Boeing, before the second MAX crash, had a market value of about $ 240 billion. Today’s market value is about $ 100 billion, well below the average Dow Index market capitalization of about $ 294 billion.
However, Boeing may have a major impact on the index because of the Dow’s price weight. So, for example, Boeing may generally be worth 1 / 20th of what Apple (AAPL) is valued in the market, but Boeing’s $ 179 share price gives it 40% of the impact of Apple’s share price in the Dow Industrials . Apple shares trade for about $ 450.
The Dow rose 1.1% on Monday, while the S&P 500 was up 0.2%. The S&P is weighted by market capitalization. Apple is the biggest weight in the S&P 500, and accounts for about 7% of that market benchmark.
Write to Al Root at [email protected]
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