(Updated at 4:58 p.m. ET)
Despite the setbacks around the 787 Dreamliner, Boeing's (BA) stock is back at levels it hasn't seen in half a decade, with the latest step upward coming after a report that it could be close to announcing an $18 billion order, one of the biggest it's ever gotten.The Chicago-based airplane maker was trading not just beyond a 52-week high Tuesday, as a cursory glance at a basic chart would show, but instead has returned to an area it last occupied in May 2008. At the close, the stock was up $1.22, or 1.5%, at $84.16.
Even though the 787 was grounded earlier this year owing to worries about the safety of the aircraft, shares of Boeing have gained 7.6% since the beginning of 2013. That's right in line with the 7.7% gain for the Dow Jones Industrial Average, of which it's a member, and ahead of the 6.4% advance for the S&P 500. Boeing's all-time closing high was $107.23 in July 2007, according to FactSet data.
The day's lift for Boeing was being influenced by a report overseas that it has secured one of the largest orders in its history. The Irish Independent says Dublin's Ryanair (RYAAY) has ordered as many as 200 Boeing jets, worth some $18 billion. Ryanair, a low-cost carrier, currently uses 737s in its fleet and has around 1,500 daily flights. The Chicago Tribune reported in January that a deal between the sides for at least 150 planes was in the works, though a Ryanair representative told the paper at the time that it was unlikely anything would be disclosed until at least the latter part of this year or in 2014. [For a larger view of the stock performance, click the chart.]
If the Ryanair pact is confirmed, as the Independent said it would be next week, it will come shortly after a productive year for Boeing, one in which it had more than 1,200 net orders and topped European competitor Airbus.
Boeing's heftiest order to date was announced in early 2012, when Indonesia's Lion Air said it would purchase 230 aircraft from the company, a deal valued at more than $22 billion. Previously, Southwest Airlines (LUV) had placed a $19 billion order to update its 737 fleet. Prices for bulk jet orders commonly are discounted during negotiations.
At the same time the order talk was making the rounds, Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, was offering upbeat comments on demand.
"The data tells us the market is strong and will continue to be strong. That's why we're confident as we raise our production rates," he said at a conference in Florida, according to a company press release. "Supply and demand will continue to be in balance as we put more airplanes into the hands of our customers."
Meanwhile, as for the 787, The Wall Street Journal reported that investigators are keying on battery design or manufacturing problems, reporting that "internal defects" could be behind a fire this year.
(After the close, CNBC reported that the Federal Aviation Administration has approved a Boeing plan to certify the new 787 batteries. It will involve testing the battery's proposed fixes as well as test flights. If Boeing's studies meet expectations, the grounding on the Dreamliner could be lifted by mid- to late-April, the report said. Shares of Boeing added 42 cents to $84.58 in post-close trading.)
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