Boeing shares slide on news of 787 delay
Boeing Co.‘s stock sank Tuesday afternoon after a report that its new 787 jetliner likely will not begin flight testing until June, at least two months later than planned after the company announced a six-month delay last fall.
The Wall Street Journal, citing unidentified sources familiar with the 787 program, said Boeing may not power up the plane’s electronics until March. It takes two to three months of testing for engineers to clear the plane for flight after the power gets turned on, so that could push flight testing into June.
The newspaper said an announcement about a new schedule for test-flying and delivering the 787 could be made as early as today.
Boeing spokesman Peter Conte declined to comment on the report.
Boeing shares slid $3.81, or 4.7 percent, to close at $77.86.
Merrill Lynch & Co. said Tuesday it is getting a fresh cash investment of $6.6 billion to strengthen its balance sheet, led by three foreign investment groups.
Merrill Lynch has been raising capital after losing billions of dollars on bad bets in the mortgage market. Rising delinquencies and defaults among mortgages have forced banks to write down the value of bonds and debt backed by the troubled loans. That, in turn, has put their levels of spare capital under pressure.
“The move reassures ratings agencies and creditors it got what it needs,” said Brad Hintz, an analyst with Sanford C. Bernstein and Co. and the former chief financial officer at Lehman Brothers.
Investors continued dumping shares of Merck & Co. and Schering-Plough Corp. on Tuesday, a day after their cholesterol-drug partnership took a hit from somewhat negative results of a controversial study, but some analysts called the worries overblown.
The study examined how much one of their cholesterol pills, Zetia, reduced plaque buildup in arteries supplying blood to the brain, compared with their heavily advertised combo pill, Vytorin. Vytorin combines Zetia and Merck’s older cholesterol drug, Zocor, now available as a cheaper generic pill.
The study found no meaningful difference between the two pills, apparently indicating Zetia gave no benefit. Publicity about the results, released Monday, pushed Schering-Plough shares down 8 percent Monday and another 6.8 percent Tuesday, to $23.78. Meanwhile, Merck shares dipped 1.3 percent Monday and another 2.7 percent Tuesday, to $58.18.