Boeing Co. (BA - Get Report) shares slipped lower Monday as a breakthrough in U.S.-China trade talks failed to offset reports that suggested the U.S. Department of Justice had issued subpoenas as part of their probe into 787 Dreamliner safety issues at its South Carolina production facility.
The Seattle Time said the DoJ is seeking records from Boeing linked to the 787's assembly in the ten-year-old South Carolina plant, which a New York Times report from earlier this spring alleged had been "plagued by shoddy production" and "weak oversight". The New York Times report said Boeing pressured employees into working more quickly to avoid production delays while "at times ignoring issues raised" by those closest to the Dreamliner's assembly, while the Seattle Times piece did not indicate if the fresh subpoenas were linked in any way with ongoing probes into the 737 MAX certification process.
The weekend agreement between Presidents Donald Trump and Xi Jinping to resume trade talks and hold off on apply new tariffs to each other's exports, however, is giving Boeing shares a much-needed lift as investors hope the detente will salvage Boeing's reported plans to sell around 100 twin-aisle 787 and 777-branded planes to China in a $30 billion deal that would be the planemaker's largest sale on record. Boeing sells around 25% of its planes to China and said demand from the world's second largest economy is likely to top 7,700 jets -- or $1.2 trillion -- over the next two decades.
Boeing shares were marked 0.9% lower at the start of trading Monday to change hands at $360.72 each, a move that eave the stock down nearly 13.8% since the March 10 crash of Ethiopian Airlines flight 302 that killed 157 people and triggered the aircraft's global grounding.
Boeing shares fell 2.1% last week, compared to a 0.44% dip for the Dow Jones Industrial Average, after the U.S. Federal Aviation Administration said it found yet another issue with the planemaker's 737 MAX software that could further delay its return to service.
The FAA also said the testing and procedures were following a process, not a prescribed timeline, for the 737 MAX's recertification, while the International Air Transport Association called for additional training requirements for crews flying the 737 MAX.
U.S. carrier United Airlines (UAL - Get Report) , meanwhile, said t will pull all MAX aircraft from its summer schedule, resulting in around 3,200 cancellations over July and August, and doesn't expect Boeing's flagship plane to return until at least September 3, echoing a similar assessment earlier this month from Southwest Airlines (LUV - Get Report) .