Boeing shares drop amid safety concerns

Boeing shares fell 2.8% in morning trading Monday after safety concerns arose over the weekend that put pressure on the stock. The stock helped drag the Dow Jones industrial average lower and was the biggest loser of the 30 stocks making up the blue-chip index.

A Malaysia Airlines' Boeing 777 disappeared early Saturday with 239 people aboard. The fate of the jet remained a mystery Monday after investigators said oil slicks off the coast of Vietnam were not linked to the flight.

Separately, Boeing said Friday that it had discovered hairline cracks on the wings of 42 Dreamliner 787 jets that are being built. No cracks were found in the 122 planes already delivered.

The company said the problem stemmed from changes in the manufacturing process at a Tokyo-based supplier, Mitsubishi Heavy Industries, and could result in delivery delays.

Business analysts said the Boeing 777 is one of the safest planes on earth, and the Malaysia Airlines tragedy should not significantly tarnish that record unless a flaw is found to have caused the incident.

"This is the best international plane ever built yet -- it's got an impeccable track record after 20 years and over 1,200 deliveries," said Richard Aboulafia, vice president for analysis with the Teal Group in Virginia. "It's typically used on international routes, and it's established a new standard for international safety."

The disaster in the South China Sea with 239 people aboard is Malaysia Airlines' first crash in nearly 20 years.

An Asiana Airlines Flight 214 crash that killed three people in July also involved a 777, which struck a seawall and broke apart at San Francisco's airport. National Transportation Safety Board investigators have focused their attention on pilot training and confusion in that incident.

Boeing issued a statement saying it was assembling a team to offer technical assistance in investigating the crash, and that "our thoughts remain with all on board and their families."

Henry Harteveldt, an analyst with Hudson Crossing in San Francisco, said the plane's "black box" that records data about the flight needs to be recovered and examined along with the rest of the recoverable wreckage.

"Only after investigators can determine the crash's cause will we be able to determine whether there will be any long-term impact to Boeing," Harteveldt said.

Shares were down $3.53 to $124.99. The stock is up 58% the past year. In January, the company said its fourth-quarter profit rose 26% as it delivered more commercial planes.


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