The stock market moved higher on Friday morning, buoyed by enthusiasm about the prospects for the U.S. economy to weather a slowdown following the release of solid employment numbers from the Bureau of Labor Statistics. As of 11:30 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 37 points to 26,422. The S&P 500 (SNPINDEX:^GSPC) gained 11 points to 2,890, and the Nasdaq Composite (NASDAQINDEX:^IXIC) picked up 39 points to 7,931.
March brought 196,000 new nonfarm jobs in the U.S., and unemployment rates stayed steady at 3.8%. That helped lift shares of many companies, but Boeing (NYSE:BA) wasn’t one of them, as the aerospace giant took steps to work through the difficulties surrounding its 737 MAX aircraft line and the two crashes that have created considerable controversy about the model’s design. Meanwhile, Aurora Cannabis (NYSE:ACB) looked beyond North America for growth and got a key win in its efforts to have a substantial presence in the European market.
Image source: Boeing.
Boeing apologizes
Shares of Boeing were modestly lower on the latest news from the beleaguered aircraft manufacturer. In a release Thursday afternoon, CEO Dennis Muilenburg apologized on behalf of Boeing for the lives lost in the two recent 737 MAX crashes. Although he emphasized that final reports haven’t yet been detailed, Muilenburg did admit that the aircraft’s maneuvering characteristics augmentation system got erroneous aerodynamic information that resulted in its improper activation.
“It’s our responsibility to eliminate this risk,” Muilenburg said. “We own it and we know how to do it.” The CEO said that after tireless work, Boeing is almost ready to finalize its software update to implement across the 737 MAX fleet, and although he apologized to Boeing’s airline customers for the impact of the aircraft’s grounding, Muilenburg nevertheless stressed the company’s relentless focus on safety.
The statement is an important step forward from Boeing, but it certainly won’t put an end to the impact of the crashes. Already, lawsuits from those killed in the incidents have started to appear, and allegations of design defects could increase the likelihood that Boeing will have to address more of those lawsuits in U.S. courts, where verdicts are likely to be higher. Moreover, affected carriers like Southwest Airlines and American Airlines Group will have credible cases to recover damages due to the grounding of the aircraft. Shareholders in Boeing therefore face a long wait before they’ll be able to measure the long-term hit to the company’s reputation and its financial condition.
Aurora heads to Germany
Shares of Aurora Cannabis were up about 2% after the Canadian marijuana company said that it had scored a major win in its international business efforts. Aurora announced that the German regulatory agency responsible for regulating drugs and medical devices named the cannabis company as one of three winners in a public tender to cultivate and distribute marijuana for medical purposes within the European nation. Aurora emerged victorious from a group of 79 participating companies, and it ended up taking five out of the 13 available lots, the most allowed under the rules of the process.
The provisions of the final contracts should include minimum supply of 4,000 kilos over a four-year period. The cannabis that Aurora produces will be sold directly to the German government, which will then participate in supplying wholesalers with products to distribute to pharmacies across Germany. As part of the deal, Aurora will build an indoor cultivation facility near Leipzig, complying with all regulations surrounding cannabis facilities.
For Aurora, expanding internationally is an important part of its long-term strategy, and the German facility should help it build out a global production footprint. If things go well in Germany, then Aurora could use the win as a springboard for further expansion across Europe and beyond.