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Boeing Shares Falling; Analyst Sees Support at $70

CHICAGO ( TheStreet) -- Shares in Boeing (BA - Get Report) were falling about 2% in premarket trading Thursday after regulators around the world grounded the aircraft maker's troubled Dreamliner 787.

Regulators generally followed the lead of the Federal Aviation Administration, which grounded the 787 Wednesday, saying airlines would have to demonstrate that the lithium-ion batteries in the aircraft were safe.

The aircraft, which first flew commercially in 2009, has faced a string of problems this year including a fuel leak, a brake-control issue and a wiring problem. But the battery problems have been the most serious.

Last week, while a Japan Airlines 787 was on the ground at Boston Logan Airport, the lithium-ion battery used by the auxiliary power unit began to smoke and then caught fire. On Wednesday, an All Nippon Airways jet made an emergency landing after a battery overheated. Hot chemical residue sprayed from the battery into the electronics bay, The Seattle Times reported.

The two Japanese airlines operate nearly half of the 50 Dreamliners now in service. The FAA's action followed the airlines' decisions to ground their 787s.

Boeing shares closed Wednesday at $74.34. An hour and a half before the opening bell on Thursday, shares in Boeing, a Dow component, were trading down $1.44 at $72.90. That is closer to the high end than to the low end of Boeing's 52-week trading range, between $66.82 and $78.02.

In a prepared statement issued Wednesday evening, Boeing CEO Jim McNerney said, "We are confident the 787 is safe and we stand behind its overall integrity.

"We will be taking every necessary step in the coming days to assure our customers and the traveling public of the 787's safety and to return the airplanes to service," McNerney said.

Some analysts continued to reiterate their faith in the aircraft maker following the FAA action. Moody's said Wednesday night that "Boeing's 787 problems are credit negative but should not impact ratings. Boeing's rating is A2 stable."

"While product performance issues are commonplace on new aircraft programs, the company faces heightened challenges in quickly resolving problems with the 787's electrical system in order to have the grounding order lifted," said Moody's analyst Russell Solomon, in a prepared statement.

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