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Boeing's shares reel on Heathrow fire, drag Dow with it

Friday, 12 Jul 2013 | 7:00 PM ET
An Ethiopian Airlines Dreamliner jet caught fire at Heathrow Airport in London on July 12, 2013.
CNBC
An Ethiopian Airlines Dreamliner jet caught fire at Heathrow Airport in London on July 12, 2013.

Boeing shares dropped sharply in heavy trading Friday, sandbagging the Dow Jones Industrial Average after a fire broke out at London's Heathrow Airport on one of the aerospace giant's troubled Dreamliner planes.

No passengers were aboard the Ethiopian Airlines aircraft, but the fire reminded investors of the battery problems that plagued the 787 earlier this year. Regulators in the U.S. and Japan temporarily grounded the Dreamliner before Boeing was able to put it back in the air.

The company's stock plunged more than 6 percent Friday afternoon before retracing some of those losses to finish down 4.7 percent at $101.87 a share. The steep drop accounted for virtually all of the Dow's losses, which began Friday's trading at a new record high. Volume in Boeing's shares was more than four times greater than the average over the previous 10 days.

Via Twitter, the company said it was "aware of the 787 event" in London, and that Boeing officials "working to fully understand and address this."

Major delays were expected for travelers using the airport, which is the world's busiest in terms of international passenger traffic.

Fire on Ethiopian Airlines 787
Friday, 12 Jul 2013 | 12:27 PM ET
CNBC's Phil LeBeau reports there's been a fire on board an Ethiopian Airlines Boeing 787 Dreamliner sitting on the runway at London's Heathrow Airport.

On Friday, the U.S. National Transportation Safety Board said it planned to send a representative to London to assist in the probe, suggesting Boeing's regulatory woes could take a new turn.

"At this point we obviously don't know what the cause is, and how long it will take to rectify the problem, whether its related to the prior problems with the 787," said J.B. Groh, an analyst who tracks Boeing for D.A. Davidson.

"The market reacts to these things pretty violently, especially with something like this where it's noteworthy given the prior problems with the [Dreamliner]," he added.

In a potentially related matter, UK-based Thomson Airways said a Florida-bound 787 experienced a "technical issue", and returned to Manchester Airport "as a precautionary measure."

—By CNBC's Javier David.

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