Boeing, the best performing Dow component this year by a wide margin, tumbled 11.5% 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, Southwest Airlines and JetBlue Airways also dropped between 1.1% and 2.5% 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.
Markets shrugged off data which showed US 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 US 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.
The S&P 500 index ended the week 2.2% 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% away from its record high hit on Sept 20.
“There are lingering economic concerns from last week,” Frederick added.
“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 8.56am ET, Dow e-minis were down 0.76%. S&P 500 e-minis were up 0.25% and Nasdaq 100 e-minis were up 0.46%.
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.
Apple rose 1.8% 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 US-Mexico border and slash other programs in his 2020 budget.
The Republican president’s proposal, slated for release at 11.30am (1530 GMT), is expected to be rejected by Congress.