Boeing down after Japanese airlines ground 787s

Boeing shares fall after another 787 incident and grounding by Japanese airlines

Associated Press

NEW YORK (AP) -- Boeing shares fell in Wednesday morning trading after two major Japanese airlines said they will ground their new 787s after one of them had to make an emergency landing.

THE SPARK: The pilot of an All Nippon Airways 787 made an emergency landing early Wednesday in Japan. The airline later said an inspection of the plane found leaking electrolyte and burn marks around the main battery. A battery of the same type, in a different part of the plane, burned on a Japan Airlines plane in Boston last week. Both airlines grounded their 787s on Wednesday.

On Wednesday morning, Goldman Sachs removed Boeing Co. from its "Conviction List" of top picks, although it left its "Buy" rating in place. It dropped its 12-month price target to $90, from $98.

Goldman Sachs analyst Noah Poponak wrote that the problems may still turn out to be "teething" issues common to new planes, but having two incidents so close together raises the risk that Boeing's 787 production speedup will be delayed, making it tougher to predict the short-term performance of its stock.

THE BIG PICTURE: Boeing has delivered 50 787s so far. The all-new plane relies more heavily on electrical power than any other airliner. So problems with its electrical system go to the heart of the plane's design. If a fix is needed — and it's not clear yet that that's the case — it could be an expensive setback for Boeing.

SHARE ACTION: Down $2.50, or 3.3 percent, to $74.44. The stock was at $77.69 before the JAL battery fire on Jan. 7.

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