The Dow Jones Industrial Average fell Monday morning thanks to a big drop in Boeing shares. A Boeing 737 Max 8 aircraft operated by Ethiopian Airlines crashed Sunday morning, the second time a plane of that model has crashed in five months. Boeing has a weighting of more than 10% of the Dow. Watch Boeing trade live.
The second crash of a Boeing 737 Max 8 aircraft in five months sent Boeing shares down 7% Monday morning, wiping out nearly $28 billion of the company’s market value.
The sell-off in Boeing, which commands a weighting of more than 10% of the Dow Jones Industrial Average, has wiped out 200 points from the index. The Dow, which was up more than 60 points in Monday morning trading, would have been trading higher if not for Boeing’s losses. By comparison, the S&P 500 index was up slightly in early action.
Boeing had previously driven 30% of the gain in the Dow this year. The Dow is a price-weighted index, meaning the company with the highest share price has the heaviest weighting. Even with Monday’s losses, Boeing’s stock price remained the highest in the index, at $371.
Unlike the Dow, the S&P 500 is weighted by market cap, meaning the largest company, Microsoft, has the heaviest weighting. By comparison, Boeing commands the 15th-biggest weighting of S&P 500 names.
Both Sunday’s crash of an Ethiopian Airlines flight, which killed all 157 on board, and the fatal crash of a Lion Air flight in Indonesia in October involved Boeing’s 737 Max 8 plane. The causes of both crashes are under investigation. Boeing has more than 5,000 orders outstanding for the 737 Max 8 aircraft.
Boeing’s stock was up 21% this year after Monday morning’s sell-off.