A plunge in the shares of the world’s largest planemaker after a fatal crash in Ethiopia set the Dow Jones Industrial index for a sharp fall at the open on Monday and capped gains in the broader markets.
Boeing Co, the best performing Dow component this year by a wide margin, tumbled 11.5 percent in premarket trading, and appeared on track for its worst day in nearly two decades after many airlines grounded the company’s new 737 MAX 8 passenger jet following the second deadly crash in just five months.
Shares of American Airlines Group Inc, Southwest Airlines Co and JetBlue Airways Corp also dropped between 1.1 percent and 2.5 percent on the news.
“Boeing without any question is going to be the theme for the Dow index today, given its enormous weighting, but I don’t see a spillover to any other indexes except airlines,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
WATCH: Ethiopian Airlines’ black box of cockpit recorder, digital flight data found as probe begins
Markets shrugged off data which showed U.S. retail sales unexpectedly rose in January, lifted by an increase in purchases of building materials and discretionary spending, but receipts in December were much weaker than initially thought.
This comes on the heels of data from last week that showed U.S. employment growth almost stalled in February, which added to global growth fears fanned by a sharp fall in China’s exports and as the European Central Bank slashed growth forecasts for the region.
WATCH: Eighteen Canadians among 157 killed in Ethiopia plane crash.
The S&P 500 index ended the week 2.2 percent lower, its biggest weekly decline since the market tumbled at the end of 2018, weighed by concerns of a slowing economy. The benchmark index is now nearly 7 percent away from its record high hit on Sept. 20.
“There are lingering economic concerns from last week,” Frederick added.
READ MORE: Mother and daughter, climate change activist identified as victims in Ethiopian Airlines crash
“When you go into a downtrend like you had in the last 5 sessions, sometime you get pauses and this is a pause, but to get the momentum to shift to the other direction you need a positive catalyst and I don’t see one on the horizon.”
At 8:56 a.m. ET, Dow e-minis were down 0.76 percent. S&P 500 e-minis were up 0.25 percent and Nasdaq 100 e-minis were up 0.46 percent.
China and the United States are still working day and night to achieve a trade deal that matches the interests of both sides, including eliminating tit-for-tat tariffs, a senior Chinese official said on Saturday.
WATCH: Officials survey wreckage of Ethiopian Airlines plane crash
Apple Inc rose 1.8 percent after Bank of America Merrill Lynch upgraded the iPhone maker’s shares to “buy” from “neutral” saying the pull back in its stock presented a buying opportunity.
In other news, President Donald Trump on Monday will ask lawmakers to hike spending for the military and the wall he wants to build on the U.S.-Mexico border and slash other programs in his 2020 budget.
The Republican president’s proposal, slated for release at 11:30 a.m. (1530 GMT), is expected to be rejected by Congress.
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