Two years on, Israel’s war in Gaza might be finally drawing to a close. The conflict built an unprecedented arms pipeline from the U.S. to Israel that continues to flow, generating substantial business for big U.S. companies—including Boeing, Northrop Grumman and Caterpillar.
Sales of U.S. weapons to Israel have surged since October 2023, with Washington approving more than $32 billion in armaments, ammunition and other equipment to the Israeli military over that time, according to a Wall Street Journal analysis of State Department disclosures.
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United Airlines Holdings Inc. on Tuesday said it was rethinking its longer-term plans for Boeing’s biggest 737 Max jet, the Max 10, after the government’s grounding of dozens of Max 9s this month raised questions over whether the aircraft maker could still deliver planes on time.
United
UAL,
Chief Executive Scott Kirby said during the airline’s earnings call on Tuesday that it wasn’t canceling its orders for the Max 10. But he said the airline was taking the jet “out of our internal plans.”
“We’ll be working on what that means exactly with Boeing,” he said. “But Boeing is not going to be able to meet their contractual deliveries on at least many of those airplanes.”
United, during the call, said that it had 277 Max 10 jets on order for the rest of the decade. Of the 107 jets set for delivery this year, 31 were Max 9s. But Chief Financial Officer Michael Leskinen said was “unrealistic” to expect those jets to arrive as currently planned.
“Look,” he said. “The reality is that with the with the Max grounding, this is the kind of straw that broke the camel’s back with believing that the Max 10 will deliver on the schedule we had hoped for.”
He added: “It’s a great aircraft. But we can’t count on it. So we’re working on alternate plans.”
The decision on the Max 10 marks the latest blow to Boeing’s
BA,
reputation, as safety concerns pile up after a panel tore off a 737 Max 9 jet flown by Alaska Airlines earlier this month.
The Federal Aviation Administration grounded 171 Boeing 737 Max 9s for inspections, leading to scores of flight cancellations for both United and Alaska
ALK,
United, when it reported fourth-quarter results on Monday, said it expected to lose money in the first quarter, following the impact of those cancellations. Still, shares were up on Tuesday on United’s full-year profit forecast.
The FAA over the weekend also recommended that operators of Boeing’s 737-900ER planes “visually inspect mid-exit door plugs to ensure the door is properly secured.” Regulators around the world grounded the 737 Max in 2019 after two fatal crashes.
Meanwhile, Ben Minicucci, the chief executive of Alaska Airlines, in an interview with NBC News published Tuesday, said inspectors found loose bolts on “many” of its Boeing 737 Max 9s after the mid-flight blowout.
“I’m more than frustrated and disappointed,” he said in that interview. “I am angry. This happened to Alaska Airlines. It happened to our guests and happened to our people. And my demand on Boeing is, what are they going to do to improve their quality programs in-house?”
As Boeing stock enters its second week of volatile trading following the 737 MAX 9 accident, and it’s still not quite clear whether its shares have been punished enough—or if there is more pain ahead.
Alaska Airlines, United Airlines and Turkish Airlines have all grounded their Boeing 737 Max 9 airplanes after part of one such jet tore away during an Alaska Airlines flight on Friday. But despite the potential safety risks for travelers and further damage to Boeing’s
BA,
reputation, some Wall Street analysts, for now, have downplayed the financial impact for the jet maker.
In part, they pointed to the company’s status as one of two major players in aircraft production — the other being Airbus
EADSY,
They also cited a tighter supply of available aircraft and limited near-term impact, at least while investigators try to figure out the cause of the incident.
Those airlines and others took the action over the weekend after a panel on a jet blew out about 10 minutes into Alaska Airlines Flight 1282 at an altitude of about 16,000 feet.
No one died in the incident. But the Federal Aviation Administration ordered the temporary grounding of certain Boeing 737 Max 9 aircraft. The order covered 171 planes.
Shares of Boeing fell 8.2% as the stock weighed on the Dow Jones Industrial Average
DJIA.
Still, some Wall Street analysts on Monday said to buy the stock anyway. They said the latest difficulties with the aircraft — which follow the 2019 grounding of Max jets by many nations following two fatal crashes — were unlikely to have a big near-term financial impact.
BofA analysts, in a research note dated Sunday, said that “at this point in time, due to the duopoly nature of the industry, we do not see this impacting orders for any of the 737 MAX variants. However, if the hits to the program do keep coming … at some point, the flying public may lose confidence in the 737 MAX which could ultimately impact sales.”
The analysts said it wasn’t clear yet whether the blowout on Friday was due to an assembly mistake at Boeing, an improper installation from fuselage maker Spirit AeroSystems or oversight issues elsewhere. But they noted that the aircraft was relatively new, having been delivered on Oct. 31. And they said that “some scrutiny must be saved for regulators as well, as the FAA is ultimately responsible for certificating these aircraft before delivery.”
Spirit AeroSystems’ stock
SPR,
was down 11%.
Analysts at William Blair also said they didn’t expect a big hit to Boeing’s financials.
“While the Alaska Airlines door plug accident was terrifying, we do not believe that it will have a major financial impact, unless another incident occurs after the aircraft returns to service,” they said in a note on Monday.
Analysts there estimated that over the past two months, the Max 9 made up less than one-fifth of Boeing’s total deliveries. They said those deliveries would only be “modestly impacted over the first quarter as it could take some time to determine the cause.”
Of the 23 analyst ratings on Boeing’s stock tracked by FactSet, 18 are buy ratings or the equivalent.
Read more: How Boeing’s latest 737 Max problem is hurting the Dow
However, Morgan Stanley analyst Ravi Shanker said the 737 Max 9 issues will likely disrupt first-quarter results for United Airlines
UAL,
and Alaska Air
ALK,
“This will hopefully be a situation resolved in days/weeks rather than months, but it will also serve as a reminder of how fragile airline capacity can be despite the overhang of capacity,” Shanker said in a Monday research note.
United Airlines’ stock rose 2.4% on Monday, while Alaska Air’s dipped by 0.3%.
Along with United Airlines, Alaska Airlines and Turkish Airlines, Copa Airlines and Aeromexico grounded about 40 Boeing 737 Max 9 planes, according to reports.
According to Deutsche Bank analysts, the affected fleet accounts for 16.1% of Alaska Airlines flights and 6.6% of United flights, although United has more 737 Max 9 aircraft than Alaska.
Other airlines with the plane in their fleet include Jet Airways of India with one plane, Jin Air of Korea with three, KLM Royal Dutch Airlines
KLMR,
with five and Korean Air Lines
003490,
with nine, according to Planespotter.net.
European regulators also grounded the 737 Max 9 for inspection.
Some major airlines do not have any 737 Max 9s in their fleets, including American Airlines
AAL,
Southwest Airlines
LUV,
and Air Canada
AC,
according to reports.
Also read: Shares in Boeing slump, supplier Spirit AeroSystems tanks, after panel blows out
Alaska Airlines grounded all of its Boeing 737-9 aircraft late Friday, hours after a window and piece of fuselage on one such plane blew out in midair and forced an emergency landing in Portland, Oregon.
The incident occurred shortly after takeoff and the gaping hole caused the cabin to depressurize. Flight data showed the plane climbed to 16,000 feet (4,876 meters) before returning to Portland International Airport.
The airline
ALK,
said the plane landed safely with 174 passengers and six crew members.
“Following tonight’s event on Flight 1282, we have decided to take the precautionary step of temporarily grounding our fleet of 65 Boeing 737-9 aircraft,” Alaska Airlines CEO Ben Minicucci said in a statement.
Each of the aircraft will be returned to service after full maintenance and safety inspections, which Minicucci said the airline anticipated completing within days.
The airline provided no immediate information about whether anyone was injured or the possible cause.
The plane was diverted about about six minutes after taking off at 5:07 p.m., according to flight tracking data from the FlightAware website. It landed at 5:26 p.m.
The pilot told Portland air traffic controllers the plane had an emergency, was depressurized and needed to return to the airport, according to a recording made by the website LiveATC.net.
A passenger sent KATU-TV in Portland a photo showing the hole in the side of the airplane next to passenger seats. Video shared with the station showed people wearing oxygen masks and passengers clapping as the plane landed.
The National Transportation Safety Board said in a post on X, formerly known as Twitter, that it was investigating an event on the flight and would post updates when they are available. The Federal Aviation Administration also said it would investigate.
The Boeing 737-9 MAX involved in the incident rolled off the assembly line and received its certification just two months ago, according to online FAA records.
The plane had been on 145 flights since entering commercial service on Nov. 11, said FlightRadar24, another tracking service. The flight from Portland was the aircraft’s third of the day.
Boeing
BA,
said it was aware of the incident, working to gather more information and ready to support the investigation.
The Max is the newest version of Boeing’s venerable 737, a twin-engine, single-aisle plane frequently used on U.S. domestic flights. The plane went into service in May 2017.
Two Max 8 jets crashed in 2018 and 2019, killing 346 people and leading to a near two-year worldwide grounding of all Max 8 and Max 9 planes.
The planes returned to service only after Boeing made changes to an automated flight control system implicated in the crashes.
Last year, the FAA told pilots to limit use of an anti-ice system on the Max in dry conditions because of concern that inlets around the engines could overheat and break away, possibly striking the plane.
Max deliveries have been interrupted at times to fix manufacturing flaws. The company told airlines in December to inspect the planes for a possible loose bolt in the rudder-control system.
By Adria Calatayud
Airbus and Hong Kong’s Cathay Pacific Airways have signed a purchase agreement for six A350F freighter aircraft with a basic price of $2.71 billion before price concessions, the companies said Friday.
Cathay said Airbus granted it significant price concessions which might be used toward the payment of the aircraft. The basic price comprises prices for airframe, optional features and engine, Cathay said.
The aircraft, expected to be delivered by the end of 2029, will expand Cathay’s cargo fleet capacity and will mainly serve long-haul destinations in North America, South America and Europe, it said.
Airbus said the A350F can carry a payload of up to 111 metric tons and can fly up to 4,700 nautical miles, or 8,700 kilometers.
Write to Adria Calatayud at adria.calatayud@dowjones.com
By Ian Walker and Joe Hoppe
Rolls-Royce Holdings is set to cut 2,000-2,500 jobs worldwide as part of a transformation program and strategy review.
The U.K.-based aircraft engine manufacturer, which announced the review plan in January, said Tuesday that the new structure will create a more agile business better able to serve customers, and help it improve its capabilities in areas such as procurement and supply-chain management.
Rolls-Royce currently employs 42,000 people worldwide.
Write to Ian Walker at ian.walker@wsj.com and Joe Hoppe at joseph.hoppe@wsj.com
A persistent 737 MAX problem for is growing, which sent the stock lower in early trading Friday.
The numbers: Orders for long-lasting goods rose in July for the third month in a row if recent ups and downs at Boeing are set aside, suggesting the struggling industrial side of the U.S. economy may have stabilized.
Durable-goods orders increased 0.5% in July if transportation — automobiles and planes — are excluded. Boeing
BA,
orders often seesaw in the summer months and distort the true condition of U.S. manufacturing.
Headline orders, which include transportation, sank by 5.2% last month, the government said Thursday.
Economists polled by the Wall Street Journal had forecast a 4.1% drop in July following a 4.4% spike in June. The topsy-turvy results in the past two months are almost entirely due to Boeing.
A better measure of the health of U.S. manufacturing, known as core orders, edged up 0.1% in July. That figure omits defense and transportation and is a proxy for broader business investment.
Business investment is running slightly ahead of last year’s pace, but it has weakened considerably, and many manufacturers are treading water.
Key details: Orders for commercial planes soared 71% in June and sank 44% in July, explaining the wildly divergent headline numbers in the past two months.
Orders for new cars rose 0.8% in July.
The transportation segment is a large and volatile category that often exaggerates the ups and downs in manufacturing.
Outside the transportation sector, new orders rose in most major categories.
Business investment has tapered off since last year, however, and companies have become more cautious in the face of rising interest rates, still-high inflation and a shift in consumer spending toward services.
Durable goods are items like planes, cars, appliances and computers. Orders rise in an expanding economy and shrink in a contracting one.
Big picture: Maybe the industrial side of the economy has hit bottom, and maybe it hasn’t. Getting a clear picture might have to wait until interest rates stop rising.
Higher borrowing costs typically stunt the economy and discourage businesses from hiring, spending and investing.
Looking ahead: “Businesses are showing caution amidst the higher rate environment and what it means for demand down the line,” said economist Ali Jaffery at CIBC Economics.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open mixed in Thursday trades.
Stock futures were falling following three straight days of losses for Wall Street. Federal Reserve Chairman Jerome Powell again will be delivering testimony before Congress. His comments on Wednesday that the central bank likely would be raising rates further this year pushed markets lower.
Investors who are buying into the post-Covid recovery of commercial aerospace will get an important update about the industry, including the hot issues of sustainability and supply-chain snags, when the Paris Air Show kicks off on Monday.
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Shares of Boeing Co. dropped 2% in midday trading Tuesday after the aerospace and defense company said it found new problems with its 787 Dreamliner jets.
The defect, which is not a flight safety concern, is connected with a stabilizer fitting, and will lead the company to inspect every plane in inventory before delivery, Boeing
BA,
said.
The inspections and required rework will affect timing of near-term 787 deliveries, but “at this time we do not expect that this issue will change our full-year guidance regarding 787 deliveries,” the company said.
At the time it reported first-quarter earnings in April, Boeing said its 787 program was producing at least three jets a month “with plans to ramp production to five per month in late 2023” and on to 10 a month by 2025-26.
In-service fleet may continue to operate, and the FAA and customers have been informed, Boeing said.
Dreamliner deliveries were halted in February after a documentation and data-analysis error, and the FAA had cleared the jets’ deliveries in March.
Boeing in April identified a problem with another jet family, the 737 Max, related to fittings.
Shares of Boeing have gained around 9% so far this year, compared with gains of about 11% for the S&P 500 index.
SPX,
WASHINGTON (AP) — A wayward and unresponsive business plane that flew over the nation’s capital Sunday afternoon caused the military to scramble a fighter jet before the plane crashed in Virginia, officials said. The fighter jet caused a sonic boom that was heard across the capital region.
Hours later, police said that rescuers had reached the site of the plane crash in a rural part of the Shenandoah Valley and that no survivors were found.
The Federal Aviation Administration says the Cessna Citation took off from Elizabethtown, Tenn., on Sunday and was headed for Long Island’s MacArthur Airport. Inexplicably, the plane turned around over New York’s Long Island and flew a straight path down over D.C. before it crashed over mountainous terrain near Montebello, Virginia, around 3:30 p.m.
The plane was technically flying above some of the most heavily restricted airspace in the nation.
A U.S. official confirmed to the Associated Press that the military jet had scrambled to respond to the small plane, which wasn’t responding to radio transmissions and later crashed. The official was not authorized to publicly discuss details of the military operation and spoke on condition of anonymity.
Flight-tracking sites showed the jet suffered a rapid spiraling descent, dropping at one point at a rate of more than 30,000 feet per minute before crashing in the St. Mary’s Wilderness.
The North American Aerospace Defense Command later said in a statement that the F-16 was authorized to travel at supersonic speeds, which caused a sonic boom that was heard in Washington and parts of Virginia and Maryland.
“During this event, the NORAD aircraft also used flares — which may have been visible to the public — in an attempt to draw attention from the pilot,” the statement said. “Flares are employed with highest regard for safety of the intercepted aircraft and people on the ground. Flares burn out quickly and completely and there is no danger to the people on the ground when dispensed.”
Virginia State Police said officers were notified of the potential crash shortly before 4 p.m. and rescuers reached the crash site by foot around four hours later. No survivors were found, police said.
The plane that crashed was registered to Encore Motors of Melbourne Inc, which is based in Florida. John Rumpel, who runs the company, reportedly told the New York Times that his daughter, 2-year-old granddaughter, her nanny and the pilot were aboard the plane. They were returning to their home in East Hampton, on Long Island, after visiting his house in North Carolina, he said.
Rumpel, a pilot, told the newspaper he didn’t have much information from authorities but hoped his family didn’t suffer and suggested the plane could’ve lost pressurization.
“I don’t think they’ve found the wreckage yet,” Rumpel told the newspaper. “It descended at 20,000 feet a minute, and nobody could survive a crash from that speed.”
A woman who identified herself as Barbara Rumpel, listed as the president of the company, said she had no comment Sunday when reached by the Associated Press.
The episode brought back memories of the 1999 crash of a Learjet that lost cabin pressure and flew aimlessly across the country with professional golfer Payne Stewart aboard. The jet crashed in a South Dakota pasture and six people died.
President Joe Biden was playing golf at Joint Base Andrews with his brother at around the time the fighter jet took off. Anthony Guglielmi, a spokesperson for the U.S. Secret Service, said the incident had no impact on the president’s movements Sunday.
A White House official said that the president had been briefed on the crash and that the sound of the scrambling aircraft was faint at Joint Base Andrews.
MarketWatch contributed.
Defense spending is on the rise around the globe. That’s good for Lockheed Martin’s business, but investors should still brace for a sales “miss” when the company reports first-quarter earnings on Tuesday morning.
Wall Street is looking for per-share earnings of $6.05 from $15 billion in sales. A year ago,
Lockheed
(ticker: LMT) reported per-share earnings of $6.44 from sales of just under $15 billion.
SpaceX scrubbed the eagerly anticipated test launch of its giant Starship rocket minutes before blastoff Monday.
The launch from SpaceX’s Starbase facility in Boca Chica, Texas, would have been the first flight test to integrate SpaceX’s Starship and Super Heavy rockets. The largest rocket ever built, Starship is designed to play a key role in returning humans to the Moon, as well as in future Mars exploration.
SpaceX scrubbed the uncrewed launch attempt about nine minutes before blastoff, apparently because of an issue related to its stage 1 rocket.
“A pressurant valve appears to be frozen, so unless it starts operating soon, no launch today,” tweeted SpaceX CEO Elon Musk.
Related: Elon Musk’s SpaceX pulls another $1.7 billion in funding
“Standing down from today’s flight test attempt; team is working towards next available opportunity,” SpaceX tweeted.
When it scrubbed the launch, SpaceX transitioned to a “wet dress rehearsal,” continuing to load propellant. SpaceX also continued its countdown to T-minus 40 seconds.
“Learned a lot today, now offloading propellant, retrying in a few days,” tweeted Musk.
“Unfortunately, due to needing to recycle the propellant, we’re looking at a minimum of 48 hours until we are able to attempt this flight test again,” said Kate Tice, SpaceX’s quality systems engineering manager, during the launch livestream.
This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/stock-market-movers-6336691f
President Joe Biden said on Saturday that he ordered U.S. officials to shoot down the suspected Chinese spy balloon earlier this week and that national-security leaders decided the best time for the operation was when the the object was over water.
“They successfully took it down, and I want to compliment our aviators who did it,” Biden said after getting off Air Force One en route to Camp David.
Fighter jets shot down the giant white balloon off the Carolina coast after it apparently traversed sensitive military sites across North America, prompting the postponement of a high-level U.S. diplomatic trip to China and becoming the latest flashpoint in the prevailing tense tone between Washington and Beijing.
“ In preparation for the operation, the Federal Aviation Administration temporarily closed airspace over the Carolina coastline, including the Charleston and Myrtle Beach airports in South Carolina and the Wilmington airport in North Carolina. ”
Defense Secretary Lloyd Austin said in a statement that Biden approved the shoot-down on Wednesday, saying it should be done “as soon as the mission could be accomplished without undue risk to American lives under the balloon’s path.”
Austin said that, due to the size and altitude of the balloon, which was floating at an altitude of about 60,000 feet, the military had determined that taking it down over land would pose an undue risk to people on the ground.
The balloon was observed Saturday morning over the Carolinas as it approached the Atlantic coast.
In preparation for the operation, the Federal Aviation Administration temporarily closed airspace over the Carolina coastline, including the Charleston and Myrtle Beach airports in South Carolina and the Wilmington airport in North Carolina. The FAA rerouted air traffic from the area and warned of delays as a result of the flight restrictions.
An operation was underway in U.S. territorial waters in the Atlantic Ocean to recover debris from the balloon, which had been estimated to be about the size of three school buses. CNN reported that, according to a senior military source, Navy divers and unmanned vessels were among the assets deployed for the recovery effort, primarily, according to the source, in 47-foot-deep water.
The balloon was downed by Air Force fighter aircraft, according to two officials who were not authorized to publicly discuss the matter and spoke on condition of anonymity. CNN reported having been informed that a single missile fired by one of the U.S. jets had brought the balloon down.
Television footage showed a small explosion, followed by the balloon descending toward the water. U.S. military jets were seen flying in the vicinity and ships were deployed in the water to mount the recovery operation.
A South Carolina man posted video that appeared to capture the event as it unfolded. He told CNN he was a social-studies teacher and that his fiancée had recommended he point his camera at the object in advance of its downing.
Officials were aiming to time the operation so they could recover as much of the debris as possible before it sinks into the ocean. The Pentagon had previously estimated that any debris field would be substantial.
The balloon was first spotted over Montana, which is home to one of America’s three nuclear-missile silo fields at Malmstrom Air Force Base.
Biden had explored ordering the downing of the balloon over land when he was first briefed on it Tuesday, but Pentagon officials advised against that course of action, warning that the potential risk to people on the ground outweighed an assessment of potential Chinese intelligence gains.
The public disclosure of the balloon’s travels this week prompted the cancellation of a visit by U.S. Secretary of State Antony Blinken to Beijing that had been scheduled for Sunday for talks aimed at reducing U.S.-China tensions.
The Chinese government on Saturday sought to play down that cancellation. “In actuality, the U.S. and China have never announced any visit, the U.S. making any such announcement is their own business, and we respect that,” China’s Ministry of Foreign Affairs said in a statement Saturday morning.
China has continued to claim that the balloon was merely a weather research “airship” that had been blown off course. The Pentagon rejected that claim out of hand — as well as China’s contention that it was not being used for surveillance and had only limited navigational ability.
The Pentagon also acknowledged reports of a second balloon flying over Latin America. “We now assess it is another Chinese surveillance balloon,” Brig. Gen. Pat Ryder, Pentagon press secretary, said in a statement. China’s Ministry of Foreign Affairs did not immediately respond to a question about the second balloon.
Blinken, who had been due to depart Washington for Beijing late Friday, said he had told senior Chinese diplomat Wang Yi in a phone call that sending the balloon over the U.S. was “an irresponsible act and that [China’s] decision to take this action on the eve of my visit is detrimental to the substantive discussions that we were prepared to have.”
Uncensored reactions on the Chinese internet mirrored the official government stance that the U.S. was overhyping the situation. Some used it as a chance to poke fun at U.S. defenses, saying it couldn’t even defend against a balloon, and nationalist influencers leapt to use the news to mock the U.S.
Republican politicians in the U.S. sought to characterize Biden’s and the Pentagon’s decision to monitor the balloon until it reached a location where it could be safely targeted militarily as kowtowing to the Chinese.
China has denied any claims of spying and said it was a civilian-use balloon intended for meteorology research. The Ministry of Foreign Affairs emphasized that the balloon’s journey was out of its control and urged the U.S. not to “smear” it based on an isolated balloon incident.
MarketWatch contributed.