(Updates with closing share price in fourth paragraph.)
June 11 (Bloomberg) -- Boeing Co. fell the most in two months as U.S. House Majority Leader Eric Cantor’s defeat in a primary election threatens congressional reauthorization of low- cost lending that benefits the world’s largest planemaker.
Keeping alive the Export-Import Bank will be an “even more high-profile/challenging fight,” Chris Krueger, a senior policy analyst for Guggenheim Securities LLC, said today by e-mail. Boeing was the “biggest loser” besides Cantor in the Virginia Republican’s surprise loss yesterday, Krueger wrote.
Ex-Im arranges financing that helps foreign airlines buy jets, a service that Boeing said last month would support $10 billion of 2014 sales. As Congress debates reauthorization, House Financial Services Committee Chairman Jeb Hensarling of Texas is being promoted as a possible Cantor successor. He has said the U.S. should “exit the Ex-Im.”
Boeing slid 2.3 percent to $134.10 at the close in New York, the steepest drop since April 10. The decline was the biggest among 30 stocks on the Dow Jones Industrial Average and erased a year-to-date gain for the Chicago-based manufacturer.
Stocks in the U.S. and Europe declined after the World Bank cut its global growth forecast to 2.8 percent from 3.2 percent, citing weaker outlooks for the U.S., China and Russia.
John Dern, a Boeing spokesman, declined to comment about yesterday’s election results.
Cantor has been an Ex-Im advocate, and his upset brings the bank’s “future into question,” two Bloomberg Industries analysts, Caitlin Webber and George Ferguson, said in a note today. “If the bank isn’t renewed by Sept. 30, the agency can’t finance new deals, though it could service existing commitments, estimated at $114 billion.”
The majority leader was upended by a Tea Party-backed challenger, David Brat, a move that may embolden more- conservative Republicans to buck party leaders. Washington-based Krueger said the bank has now been thrust into a “conservative uproar” over what critics decry as “corporate welfare.”
Boeing was also downgraded to the equivalent of hold today by Robert Stallard, a New York-based aerospace analyst with RBC Capital Markets. After the shares jumped 81 percent in 2013, Boeing is “fairly valued around current levels,” he said in a note to clients.
For More News and Information: Business Vows Not to Be Caught Napping Again on Ex-Im Debate NSN N4HTG56KLVR5<GO> U.S. Stocks Fall With Europe on Global Forecast; Treasuries Gain NSN N70G686TTDSU<GO> Cantor Loss Upends Republican Ranks, Dims Immigration Bill NSN N70AQN6TTDS1<GO> Boeing Co. news: BA <US EQUITY> CN <GO>
--With assistance from Brian Wingfield, Derek Wallbank and Jonathan Allen in Washington.