By Yasin Ebrahim
Investing.com – The Dow made a strong start to the week, powered by surge in Boeing (NYSE:BA) as the aircraft maker’s 737 MAX took its first steps toward recertification after Federal Aviation Administration got testing of the much-maligned jets underway.
The Federal Aviation Administration initiated its recertification flight for Boeing’s 737 MAX jets, marking a key step toward getting the planes, which have been grounded since March last year, back in operation, sending the aircraft maker’s shares soaring 12%.
The test, which will take place over three days, would also examine whether the flaws in the 737 MAX’s Maneuvering Characteristics Augmentation System (MCAS) – that many blame for the two crashes that killed 346 people – have been remedied.
Also adding to positive sentiment on airlines, Goldman Sachs upgraded its rating on Southwest Airlines Company (NYSE:LUV) to buy from sell and raised its price target on the stock to $47 from $35 per share, citing the carrier’s domestic focus and better-than-expected cash management in the airline industry.
Yet, demand remains the overarching concern for airlines at a time when Covid-19 cases continued to mount.
Coronavirus cases worldwide passed 10 million over the weekend, driven by an ongoing spread of the virus in the U.S., where the death toll has topped 125,000 with as many as 2.6 million confirmed infections.
“Although many countries have made some progress, globally, the pandemic is actually speeding up,” WHO chief Tedros Adhanom Ghebreyesus said during a virtual news conference.
The sharp jump in cases has added a sense of urgency to the development of treatments and vaccines.
Gilead Sciences (NASDAQ:GILD), up 1%, said its coronavirus treatment, Remdesivir, would cost hospitals $3,120 for patients with private health insurance.
U.S. health secretary Alex Azar has warned that “the window is closing” on the country’s chance to contain the coronavirus.
Energy, meanwhile, also lent support to the broader market, underpinned by rising oil prices as better-than-expected industrial data from China, the largest oil consumer, suggested its economic recovery remained on track.
In technology, Facebook (NASDAQ:FB) cut losses to end nearly 2% higher despite Starbucks (NASDAQ:SBUX), Coca-Cola (NYSE:KO), and Microsoft (NASDAQ:MSFT), joining the growing list of companies temporarily pausing social media advertising.
Apple (NASDAQ:AAPL) ended 2% higher, with news that The New York Times has ended its partnership with Apple News drawing a muted reaction.
Elsewhere, Beyond Meat (NASDAQ:BYND) fell 9% after Barclays (LON:BARC) downgraded the stock to underweight from overweight, as an uncertain outlook for restaurant industry and a recovering meat supply chain are expected to weigh on growth.
On the economic data front, pending home sales rose a record 44.3% in May following a 34.6% decline in April, topping economists forecasts for a 19.3% increase in May.
Dow Rides Boeing Surge as 737 Test Flight Takes Off