The Grounded Plane: Boeing delays 787 Dreamliner

Technical complications, worker strikes, and everything in between has at one point or another hampered Boeing's (BA) ability to deliver its much-delayed 787 Dreamliner aircraft. The stock took an almost 7% dive today, adding to a 40% drop in the last year and a 50% drop since October of 2007. That being the announcement of the first 787 delay for the aircraft company.

Investor patience is being tested to the limits with Boeing as it is in a sharp fight with rival Airbus for future contracts in an industry marred with carriers in serious financial trouble, given the latest economic fallout and fluctuations in energy prices. Boeing has historically seen several missteps as it works on its revolutionary, next generation plane and what had been seen as a sales boom for the company is now once again stalled at the factory.

The aircraft is a first for many reasons, from its 250-seat advanced interior to its exterior made entirely of composite materials, an industry first. Boeing was confident in its ability to deliver the aircraft in the first half of next year to its customers, however delaying the first flight indefinitely due to newly-found exterior stresses, will likely push dates back by months. This news did not please investors in today's trading session, sending shares lower by $3.

What's in store for Boeing stock? The March lows of around $30 will still be the complete floor of support, unless the general economic footprint fails further, so any pullback into the low $40s is attractive for this large-cap with a nearly 4% dividend yield. Remember, this stock was in the $80s a year ago, despite having already delayed the 787 several other times. So when that first flight and initial delivery take place next year, those are catalysts that provide the company with two major milestones to appease investors. Aircraft have been in the news recently for the most tragic of events, as the investigation into the Air France Airbus crash continues, but precisely when the mood is most distraught around an industry, is when some attractive valuations can be found. Is it Boeing's time in the mid $40s? Yes, but buy in parts, and if the stock retreats to $40 it'll itself be a Dreamliner in the year(s) to come.

Disclosure: Author holds no position in BA

Markets Rise Modestly Thursday on Subdued Volume while China Stocks Soar

North American market were higher across the board Thursday as Investors were buying cautiously towards the end of the quarter. Many however sat on the sidelines as trading volume was lower across the board than in previous weeks. The Dow, Nasdaq and S&P all saw gains today of about .3%. In Canadian Markets the TSX was up almost triple digits which translated to about .7% in the green.

Google (GOOG) went in front of the Government today to defend its decision to buy DoubleClick. A group of challengers led by Microsoft (MSFT) had complained that this deal would give Google too much power over Internet Advertising. Google's dominance in search ads, coupled with DoubleClick's reporting and distribution services would give Google too much control according to Microsoft. Yes, I understand the irony of Microsoft complaining about Anti-Trust issues hot on the heels of its appeal loss in Europe for the very same infractions. Talk about the Pot calling the Kettle black! Google seems confident enough that the deal would be allowed to go through as it points out that Microsoft had also been in the bidding for DoubleClick and lost, having to settle for competitor aQuantive.

In the airline sector a large order was placed by British Airways (BAIRY). The company leveraged heavy competition between Boeing (BA) and Airbus and took orders from both airplane makers. The Airline placed an order for 12 Airbus A380 planes and 24 Boeing 787s with an option to buy even more planes should needs arise. British Airways climbed almost 5% on the news while Boeing was only slightly higher.

The other continuing big stock growth story is China. Many Chinese based companies have done extremely well this week and the run was capped off today with even more substantial gains. China Eastern Airlines (CEA) was up 15%, China Telecom (CHA) was up 15% and 18% on the week and China BAK Battery (CBAK) was up 19% and has doubled in the last 5 days. Another Chinese mobile/Internet play KongZhong (KONG) was really flying today as the stock jumped 72% rebounding from year-lows recently.

While its tempting to jump in and try to ride more momentum here, caution is the name of the game. With these type of gains an cool, calm and collected investor would sit back and see whether the now inflated prices can be sustained going forward to a quick trade. While I would particularly be cautious about the Airline industry, China Telecom is a great play on the expanding mobile world and KongZhong was beaten down from the $10s to the high $3s before rebounding now to $8.50 on inklings of hope and raised estimates. Due to government control and very strict laws the Chinese business world is one not fully understood by a majority of casual investors and as such I don't recommend jumping in blind hoping to catch a wave.

Disclosure: Author is long GOOG and holds no position in any other companies mentioned