MANUFACTURING

BOEING WINS $2.16 BILLION NORTHWEST ORDER FOR 18 787S

Boeing, the world’s no. 2 commercial-airplane maker, won an order yesterday from Northwest Airlines for 18 of its new 787 airplanes valued at about $2.16 billion, beating Airbus SAS for the third time in two weeks.

Northwest, the fourth-largest American airline, also has the option to buy 50 additional planes. Deliveries will begin in August 2008, the St. Paul, Minn.-based carrier said in a statement.

The order is a blow for Airbus, whose planes make up a bigger portion of Northwest’s fleet than Boeing aircraft. Boeing is counting on the fuel-efficient 787 Dreamliner, its first new plane in 15 years, to retake the industry lead within two to three years from Airbus, which has yet to win board approval to begin production on a competing model known as the A350.

Boeing has now won orders valued at $15.2 billion at list prices since April 25. Air Canada said that day it would buy 32 Boeing planes valued at as much as $6.1 billion, including 14 787s. The following day Air India placed an order valued at $6.9 billion for 50 jets, including 27 787s.

Both airlines also ordered the 777 model. Boeing is marketing the two planes as a package, saying they can be swapped on long-distance routes depending on demand and also share parts.

– Bloomberg News

WALL STREET

STOCKS SINK ON AUTOMAKERS’ S&P DOWNGRADE Jittery investors sold stocks lower yesterday as the downgrading of bonds issued by General Motors and Ford Motor undermined the market’s confidence and erased its earlier modest gains.

The Dow Jones industrial average fell 44.26, or 0.43%, to 10,340.38, ending a four-day winning streak. Much of the loss could be attributed to GM’s falling stock price. The Standard & Poor’s 500 index dropped 3.02, or 0.26%, to 1,172.63, and the Nasdaq composite index fell 0.43, or 0.02%, to 1,961.80.

“The market shouldn’t be dropping this much just because of two companies in one sector. Everyone knew Ford and GM were hurting, no matter what Kerkorian did yesterday,” said Brian Pears, head equity trader at Victory Capital Management in Cleveland. “It shows the skittishness of this market. Any feelings of bullishness we may have had are very tentative still.”

– Associated Press

LAZARD SHARES SLIP ON FIRST DAY OF TRADING AFTER IPO

Shares of Lazard, the investment bank that raised $855 million in an initial public offering, fell on their first day of trading as underwriters including Goldman Sachs Group failed to keep the stock above its sale price.

The stock, priced at $25 late Wednesday, declined $1, or 4%, to $24 on the New York Stock Exchange yesterday as almost 35 million shares changed hands. The Amex Securities Broker/Dealer index, which includes Lazard rivals such as Morgan Stanley and Lehman Brothers Holdings, fell 0.4%.

“When you see it trading near the offer price like that it means the underwriters are supporting the stock,” said Steven Rattner, a former Lazard vice chairman who’s now managing principal at New York buyout firm Quadrangle Group LLC. “You normally want to see it go up 10%.”

– Bloomberg News

ECONOMY

AMERICAN LABOR COSTS, PRODUCTIVITY ACCELERATE

Accelerating labor costs and signs of slower economic growth prompted American companies to throttle back on the number of hours their employees worked in the first quarter, leading to a larger-than-expected rise in productivity.

The 2.6% annualized increase in productivity, which measures how much an employee produces for every hour of work, followed a 2.1% rise in the previous three months, the Labor Department said yesterday in Washington. Labor costs rose at a 2.2% annual rate after a 1.3% fourth-quarter gain.

– Bloomberg News