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Employees work on Boeing 737 MAX airplanes at the Boeing Renton Factory in Renton, Washington on March 27, 2019.Jason Redmond | AFP | Getty Images

Numerous design, management and regulatory failures during the development of the 737 Max preceded the "preventable death" of 346 people in two crashes of the popular Boeing jetliner, according to a damning congressional report released Wednesday.

The House Committee on Transportation and Infrastructure's 238-page report painted a Boeing that prioritized profits over safety and detailed "disturbing cultural issues" relating to employee surveys showing some experienced "undue pressure" as the manufacturer raced to finish the plane to compete with rival Airbus. The report said concerns about the aircraft weren't sufficiently addressed to spur design changes.

Some lawmakers this year introduced legislation that aims to increase the Federal Aviation Administration's oversight of the industry.

The report, in the works for about 18 months, comes as regulators are in the final stretch of work to recertify the planes. The 737 Max has been grounded worldwide since March 2019, following the second of the planes' two fatal crashes.

"They were the horrific culmination of a series of faulty technical assumptions by Boeing's engineers, a lack of transparency on the part of Boeing's management, and grossly insufficient oversight by the FAA—the pernicious result of regulatory capture on the part of the FAA with respect to its responsibilities to perform robust oversight of Boeing and to ensure the safety of the flying public," said the report. The lawmakers and staff received 600,000 pages of records from Boeing, the FAA, airlines and others, for its investigation, conducted interviews with two dozen employees and regulators, and considered comments from whistleblowers that reached out to the committee, they said.

Lion Air Flight 610 from Jakarta, Indonesia, on Oct. 29, 2018, and Ethiopian Airlines Flight 302 from Addis Ababa, Ethiopia, on March 10, 2019, both crashed shortly after takeoff, killing everyone on board. At the center of the crashes was an automated system known as MCAS, against which pilots for both flights battled against. It was activated after receiving inaccurate sensor data. 

Pilots were not informed of MCAS until after the first crash and mentions of it were removed from their manuals. Last year, the National Transportation Safety Board found Boeing overestimated pilots' ability to handle a flurry of alerts during malfunctions.

Boeing has made changes to the MCAS system that render it less powerful, give pilots greater control and provide it with more data before it is activated. That is among other changes regulators have reviewed as part of the process in recertifying the planes as safe for the traveling public.

"We have learned many hard lessons as a company from the accidents of Lion Air Flight 610 and Ethiopian Flight 302, and from the mistakes we have made," Boeing said in a written statement. "As this report recognizes, we have made fundamental changes to our company as a result, and continue to look for ways to improve. Change is always hard and requires daily commitment, but we as a company are dedicated to doing the work."

The House report, led by Rep. Peter DeFazio, D-Ore., the committee chair, and Rep. Rick Larsen, D-Wash., head of the aviation subcommittee, said its investigation "leaves open the question of Boeing's willingness to admit to and learn from the company's mistakes."

Some of crash victims' family members say Boeing has not done enough.

"I think the project as a whole should be scrapped," Yalena Lopez-Lewis, whose husband Antoine was killed on the Ethiopian Airlines flight, said in an interview. "I think this was a rushed project and ... now they're rushing to recertify. You can't place a dollar value on the lives of any passenger."

Michael Stumo, whose daughter Samya Stumo was killed in the Ethiopian Airlines crash, said Boeing and regulators didn't do enough after the first crash five months earlier.

"Before Lion Air it was a mistake. After Lion Air it was unforgivable," he said in an interview.

The crashes pushed Boeing into its biggest-ever crisis, as its bestselling aircraft couldn't be delivered to customers and costs mounted. The various missteps cost Boeing's former CEO Dennis Muilenburg his job and prompted the company to undergo an internal restructuring to improve its approach to safety. Now the coronavirus pandemic that has roiled air travel demand worldwide coupled with the extensive grounding presents Boeing with a new problem: cancellations of the planes are piling up. 

The manufacturer's problems don't end with the 737 Max. It recently discovered flaws on some 787 Dreamliners, prompting inspections that have slowed deliveries of the wide-body aircraft.

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Dow ends 525 points lower as tech tumbles, stocks close near session lows

USA TODAY Sports Super 25 high school football rankings: Week 4 This Is the Best Way to Lower Your Cable Bill, Experts Say Dow ends 525 points lower as tech tumbles, stocks close near session lows MARKET SNAPSHOT © Getty Images Wall Street

Major U.S. stock indexes closed lower on Wednesday, sliding in the final hour of trade, as market participants struggled to shake off worries about a lack of a coronavirus aid package and rising COVID-19 cases.

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How did major benchmarks fare? The Dow Jones Industrial Average (DJIA) tumbled 525.05 points, or 1.9%, to close at 26,763.13, while the S&P 500 (SPX) lost 78.65 points, or 2.4%, ending at 3,236.92. The Nasdaq Composite Index (COMP) shed 330.65 points, or 3%, finishing at 10,632.99, after plunging as low as 3%.

That left the Dow 9.4% off its record close in February, the S&P 9.6% lower than its September all-time high and the Nasdaq 11.8% down from its September record, according to Dow Jones Market Data.

On Tuesday, the Dow rose 140.48 points, or 0.5%, to end at 27,288.18, while the S&P 500 finished 34.51 points higher, up 1.1%, at 3,315.57. The Nasdaq gained 184.84 points, or 1.71%, to close at 10,963.64.

What drove the market?

The losses took the S&P 500 within a whisker of a correction, defined as a 10% pullback from a recent peak.

“In big tech, a lot of the growth and momentum in stocks that exploded through the end of August, a lot of that’s retracing,” said Sahak Maneulian, head of equity trading at Wedbush Securities, in an interview. But volatility

(VIX) also has made a comeback, he said, following a long period of dormancy. “We’re in the technical downdraft and it’s very hard to get out of as we get closer to the election and year-end.”

Equities briefly caught a footing in Tuesday’s session, but were pressured again Wednesday amid deep-seated divides in Washington over additional pandemic aid and a resurgence of coronavirus cases in Europe and parts of the U.S., including in Texas, Wisconsin, Oklahoma and Colorado.

“There’s been a worry about what happens going into the fall and winter. That’s on investors’ minds,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management, of rising COVID-19 cases and political unease ahead of the Nov. 3 general election.

“But I also think investors are reluctant to keep their feet completely out of the market,” he told MarketWatch, pointing to expectations for a safe and effective vaccine to be available at some point next year.

Johnson & Johnson (JNJ) on Wednesday announced the start of a 60,000-person clinical trial of its single-dose COVID-19 vaccine on three continents, making the drugmaker the fourth experimental vaccine candidate to enter final-stage testing in the U.S.

Skeptics said Tuesday’s brief turnaround for stocks was unconvincing, particularly given the still elevated stock values against a backdrop of tremendous uncertainty.

“It’s not a surprise it’s becoming a little more volatile heading into the election,” Esty Dwek, head of global macro strategy at Natixis Investment Management, told MarketWatch. “But right now it’s kind of more about Congress.”

“After Justice Bader Ginsburg’s passing, the probability of another fiscal package before the election has become quite small.”

Related: Coronavirus deal prospects, already dim, recede further with pact to keep government open

Jitters over the potential for a contested presidential election outcome on Nov. 3 are also hanging over the market, analysts said.

Even after November’s election, investors should brace for potential protests against it, the uncertain timing and rollout of a vaccine, and more, said Peter Andersen, founder of Andersen Capital Management, in an interview.

“I tell investors to focus on stocks that almost have an organic demand for products and services that will remain strong no matter what the election results, the vaccine hysteria, and the national polarization,” he said.

On the economic front, Federal Reserve Vice Chairman Richard Clarida said Wednesday that policy makers won’t contemplate raising interest rates until inflation is clearly back at 2%—and possibly even beyond. Randal Quarles, the Fed’s vice chairman for banking supervision, said he’s optimistic about the outlook but also agreed with Fed Chair Powell that continued support will be required to sustain a robust recovery, in a Wednesday speech.

A September composite purchasing managers index flash reading from IHS slipped to 54.4 in September from 54.6 in the prior month, signaling a slower pace of growth. The flash services purchasing managers index inched down to 54.6 from 55 in August. The flash manufacturing index rose to 53.5 in September from 53.1 in the prior month, still marking a 20-month high.

Read: How far do stocks have to fall for Washington to take action? You may not like the answer

Which companies were in focus?
  • Apple Inc. (AAPL) shares closed 4.2% lower, while Inc. (CRM) fell 4.8%, after technology shares came under sharp selling pressure.
  • Shares of Dow component Nike Inc. (NKE) jumped 8.8% after the athletic apparel company delivered results late Tuesday that easily beat Wall Street forecasts.
  • Stitch Fix Inc. (SFIX) shares slid 15.5% after the provider of clothing and accessories subscriptions reported a bigger quarterly loss than expected.
  • Shares of Johnson & Johnson (JNJ) rose 0.2%, after the health care and pharmaceutical company said it had launched a global Phase 3 trial of its COVID-19 vaccine candidate.
  • Shares of Tesla Inc. (TSLA) fell 10.3% after the electric-auto maker unveiled innovations and increased efficiencies that appeared to disappoint investors late Tuesday at its “Battery Day” event. Oppenheimer analysts said its stock still was a “buy.”
  • KB Home (KBH)shares lost 7.5% lower despite a pair of price-target increases.
  • General Mills Inc. (GIS) shares fell 0.5% after the cereal maker beat on earnings and hiked its dividend.
  • GoodRx Holdings Inc. (GDRX) completed an initial public offering Wednesday, and it didn’t come cheap. The prescription drugs and other medical help company raised more than $1 billion, with shares clearing at an $33 IPO price, but ending the session up 53%.
  • SPI Energy Co. (SPI) shares soared 1,236.52% on Wednesday, following an announcement by the company that it was starting an electric-vehicle subsidiary.
How did other markets fare?

The yield on the 10-year Treasury note (BX:TMUBMUSD10Y) was up 1.3 basis points at 0.676%. Bond prices move inversely to yields.

The ICE U.S. Dollar Index (DXY) was up 0.4% at 94.39.

Gold futures (GCZ20) fell 2.1% to settle at $1,868.40 an ounce, their lowest in two months.U.S. oil futures (CLX20) closed 0.3% higher to end at $39.93 per barrel on the New York Mercantile Exchange.

The pan-European Stoxx Europe 600 Index (XX:SXXP) closed 0.6% higher and the U.K.’s benchmark (FR:FTSE) gained 1.2%. In Asia, Hong Kong’s Hang Seng Index (HK:HSI) rose 1% and the Shanghai Composite Index (CN:SHCOMP) closed 0.2% higher. Japan’s Nikkei (JP:NIK) slipped less than 0.1%.

William Watts contributed reporting .

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