Why Shares of Boeing and Its Suppliers Are Up Today
Shares of Boeing (NYSE: BA) opened Monday 7% higher, and shares of key suppliers are up even more, on investor optimism about progress in the race to find a vaccine for COVID-19. Commercial aerospace stocks have plunged this year due to the pandemic's chilling impact on the airline industry. The sooner the pandemic can be resolved, the better chance there is that the airlines survive and eventually resume buying airplanes.
Shares of Allegheny Technologies (NYSE: ATI) opened 13.6% higher, Spirit AeroSystems Holdings (NYSE: SPR) jumped 12%, TransDigm Group (NYSE: TDG) was up 10%, and both Heico (NYSE: HEI) and General Electric (NYSE: GE) climbed 9%. All of the stocks gave back part of those initial gains as the morning went on, but all were still handily beating the market as of 10:45 a.m. EDT today.
A decadelong surge in new plane sales came to a grinding halt earlier this year after the COVID-19 pandemic decimated demand for travel, causing airlines that were in expansion mode coming into the year to suddenly focus on cost-cutting. The airlines are cutting flights and grounding planes, lessening demand for spare parts and putting Boeing's new-plane order book in jeopardy.
Source Fool.com
