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Boeing, Tesla, Royal Caribbean, Lucid Motors - 5 Things You Must Know Monday

Stock futures tumble after the S&P 500 posts its first weekly loss in three and a selloff in bonds continues; Boeing's 777 is grounded by airlines in the U.S. and Asia following an engine failure; Tesla reportedly stops Taking orders for the cheapest versions of its Model Y.

Here are five things you must know for Monday, Feb. 22:

1. -- Stock Futures Slump as Bond Yields Rise

Stock futures were tumbling Monday after the S&P 500 posted its first weekly loss in three and a selloff in bonds continued.

Contracts linked to the Dow Jones Industrial Average dropped 196 points, S&P 500 futures were down 31 points and Nasdaq futures declined 187 points.

The 10-year Treasury yield was at 1.377% but had risen as high as 1.394% in action Monday.

Bond prices, which have an inverse relationship with yields, have been falling on fears that improved vaccine rollouts and more fiscal stimulus will lead to higher inflation and that rising borrowing costs could lead to a stock market pullback.

The U.S. House of Representatives likely will vote on President Joe Biden’s proposed $1.9 trillion stimulus package by the end of the week. The bill includes $1,400 checks to most Americans, a hike in the minimum wage to $15 an hour, and a boost in supplemental unemployment benefits to $400 a week from $300.

Stocks closed mixed Friday, with the S&P 500 falling for a fourth straight day and finishing with its first weekly loss in three weeks.

2. -- Boeing 777s Are Grounded in U.S. and Asia After Engine Failure

Boeing  (BA)  shares were falling Monday after the company's 777 jets were grounded by certain airlines in the U.S. and Asia following an engine failure that showered debris over a Denver suburb.

The stock was down 2.98% to $211 in premarket trading.

The Federal Aviation Administration issued an emergency airworthiness directive requiring "immediate or stepped-up inspections" of Boeing 777 airplanes equipped with some Pratt & Whitney PW4000 engines, following engine failure on a Boeing jet that was operated by United Airlines  (UAL)  over the weekend. 

"This will likely mean that some airplanes will be removed from service," said FAA Administrator Steve Dickson in a statement. "Based on the initial information, we concluded that the inspection interval should be stepped up for the hollow fan blades that are unique to this model of engine, used solely on Boeing 777 airplanes." 

United said it would voluntarily halt operations of 24 of its planes while the FAA inspected the engines.

In a statement, Boeing said it "recommended suspending operations of the 69 in-service and 59 in-storage 777s powered by Pratt & Whitney 4000-112 engines until the FAA identifies the appropriate inspection protocol."

The PW4000 family of engines is made by Raytheon Technologies  (RTX)  Pratt & Whitney division. Raytheon didn't respond to a request for comment from TheStreet on Sunday, saying only it was passing questions along to its subsidiary.

Japan’s transport ministry grounded the 777 planes early Monday, as did Korean Air Lines.

3. -- Tesla Reportedly Stops Taking Orders for Cheapest Versions of Model Y

Tesla  (TSLA)  has stopped taking orders for the cheapest version of its Model Y electric SUV and removed it from its online configurator just a month into launching the vehicle, according to a report from Electrek.

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The Model Y Standard Range also disappeared from Tesla’s Canadian online configurator.

Electrek noted that it was unclear whether the Model Y Standard Range was now canceled altogether or if Tesla was just pausing taking orders for the base version of the electric SUV.

Last week, Tesla lowered the price of the Model Y Standard Range Plus to $39,990 from $41,900, and also reduced the price of its Model 3 Standard Range Plus to $36,990 from $37,990.

Tesla shares declined 2.66% in premarket trading Monday to $760.50.

4. -- Monday's Calendar: Royal Caribbean and Occidental Petroleum Earnings

Royal Caribbean Cruises  (RCL)  posted an adjusted fourth-quarter loss of $5.02 a share, wider than estimates of a loss of $4.93.

Earnings reports are also expected Monday from Palo Alto Networks  (PANW) , Occidental Petroleum  (OXY) , DISH Network  (DISH) , Discovery  (DISCA) , Diamondback Energy  (FANG) G and RealReal  (REAL) .

Reports later in the week are expected from Home Depot  (HD) , Lowe's  (LOW) , Macy's  (M) , Square  (SQ) , TJX Cos.  (TJX) , Nvidia  (NVDA) , L Brands  (LB) , Best Buy  (BBY) , Dell Technologies  (DELL) , VMware  (VMW) , Salesforce  (CRM) , Rocket Cos.  (RKT)  and HP Inc.  (HPQ) .

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The U.S. economic calendar for Monday includes Leading Economic Indicators for January at 10 a.m. ET. Data will be released later this week on consumer confidence, new home sales, durable goods orders, fourth-quarter gross domestic product and jobless claims.

Federal Reserve Chairman Jerome Powell will speak Tuesday before the Senate Banking Committee and before the House Financial Services panel on Wednesday.

5. -- Lucid Motors Close to Going Public Via SPAC Route

Lucid Motors, the electric vehicle startup, is close to a deal to go public through a merger with a blank-check company started by investment banker Michael Klein, Bloomberg reported, citing people familiar with the matter.

A deal for Lucid could be announced on Tuesday, two of the people said. The talks remain ongoing, however, and could still fall apart.

The combined entity will be valued at as much as $15 billion, the people said.

The special purpose acquisition company has been in talks to raise between $1 billion and $1.5 billion in funding from institutional investors to support the transaction, the people told Bloomberg. 

Klein will use Churchill Capital Corp IV (CCIV), his largest SPAC that has raised more than $2 billion, for the transaction, the people said. Lucid is backed by Saudi Arabia’s sovereign wealth fund.

The merger between Lucid and Churchill Capital would be the biggest in a string of deals by EV makers such as Nikola  (NKLA)  and Fisker  (FSR)  that have gone public by combining with SPACs, noted Reuters, which reported on the possible deal last week. They have been raising cash to compete with Tesla , the top electric vehicle company.