The major U.S. stock indexes were mixed Friday morning, with the Dow Jones Industrial Average (DJINDICES:^DJI) holding onto a solid gain. The Dow was up 0.6% at 11:40 a.m. EDT.
In economic news, U.S. inflation ramped up in August partly due to a surge in used vehicle prices. The consumer price index jumped 1.3% from a year ago, and it was up 0.4% from July. The cost of used cars and trucks rose 5.4%, accounting for a substantial portion of the increase.
Walt Disney (NYSE:DIS) stock failed to rally on Friday as the company's expensive Mulan film faces pressure in China. Meanwhile, bad news related to the 787 Dreamliner failed to prevent shares of Boeing (NYSE:BA) from having a positive day.
Disney faces Mulan headwinds in China
Disney's parks business was hit hard by the COVID-19 pandemic, but the company's film business was also seriously disrupted. Disney poured $200 million into Mulan, a live-action adaptation of its 1998 animated film based on Chinese folklore. In normal times, Mulan would have likely been a smash hit in both the United States and China.
But these are not normal times. With major U.S. movie theater chains only recently reopening their doors to guests, a standard movie theater run for Mulan wasn't going to work. Disney opted instead to offer Mulan to its Disney+ subscribers in the U.S. for an additional $30 fee, with the film set to become available to subscribers without the fee in December.
This strategy will help Disney recoup some costs. In China, Disney has released Mulan to theaters, but controversy surrounding the film could hurt its performance. Social media backlash outside of China over the film being partly filmed in the Xinjiang region has led to calls to boycott Mulan. Inside China, Reuters reported on Thursday that authorities have told major media outlets to not cover the film release at all.
All of this bodes poorly for Disney's ability to turn a profit on Mulan. Disney stock was down slightly by late Friday morning. Shares of the entertainment giant are down about 8% since the start of the year.
Another 787 Dreamliner flaw found
Last month, Boeing told airlines to ground a small number of 787 Dreamliner jets due to two separate manufacturing issues. A third manufacturing issue was disclosed earlier this week related to the 787's horizontal stabilizer, although Boeing doesn't see it jeopardizing safety.
Late Thursday, yet another problem with the 787 was disclosed after KOMO News Radio obtained documents detailing a fourth manufacturing issue with the plane, this time related to the vertical tail fin. KOMO reported that excessive gaps could cause strain on the plane's structure over time, potentially threatening safety.
In a statement, Boeing said the issue was discovered in late 2019 and has already been fixed in production. The company determined that the problem didn't immediately affect safety and that no immediate action was required. If action is eventually required, KOMO reports that 680 planes could be affected.
While these issues may not require extensive grounding of the 787 fleet, they further damage Boeing's reputation. On top of the problems with the 787, the company is still working with regulators to get the 737 MAX back in the air following two fatal crashes.
Shares of Boeing were up 1.6% by late Friday morning despite the 787 news. The stock has tumbled more than 50% so far this year.