Boeing Shares Rally on China Order Optimism

Boeing Co. shares rallied to a record high Monday on optimism that Chinese airlines could agree to buy 80 single-aisle 737 jets that they have been in talks to acquire since last year.

Boeing shares closed up $1.22 to $80.79, after touching a record $80.92 earlier in the day.

The rally in the shares came a day before a scheduled signing ceremony between Boeing and Chinese officials at the U.S. Commerce Department.

A Boeing spokesman confirmed that the top U.S. plane maker expected to issue a statement today.

A spokeswoman for the Chinese consulate said last week that Boeing was expected to sign a deal to sell more planes to China.

A person close to Boeing this year said the company was in talks with individual Chinese airlines to order 80 more Boeing 737 jets -- worth some $4.6 billion -- completing negotiations announced in November for 150 of the planes.

Chinese airlines confirmed orders for 50 of the planes in December and another 20 at the end of January.

It remains unclear whether the ceremony today -- a week before a scheduled meeting between President Bush and his Chinese counterpart, Hu Jintao -- will announce a firm order or a looser form of commitment for the remaining 80 planes.

“There’s an order coming from the Chinese and I think more people are realizing that Boeing has done a nice job of managing its business,” said Howard Rubel, an analyst at Jefferies & Co., when asked about the stock’s rally.

Optimism about the China deal also boosted trading on Boeing options.