Shares in US aviation giant Boeing fell precipitously on Wednesday, dragging the Dow Jones Industrial Average lower moments after President Donald Trump announced the grounding of top-selling aircraft.

It was an erractic day as Boeing shares recovered early in the session, but lost nearly 3 % after Trump's announcement, before regaining some ground. It was down 1.2 % just after 1900 GMT at $371.20.

The stock is now down more than 12% since before Sunday's crash of an Ethiopian Airlines flight, and wiping billions off the company's market value.

The benchmark Dow, which is heavily weighted to Boeing's shares, fell about 100 points, but then bounced back to show a 0.3% gain.

Meanwhile the broader S&P 500 held on to earlier winnings, putting it up 0.7% at 2,811.89 and the tech-heavy Nasdaq was even higher at 7,651.91.

Trump's announcement came hours after a similar decision by Canadian authorities and made the United States among the last nations in the world to take action to ban the planes.

Sunday's crash of Ethiopian Airlines Flight ET302 was the second in less than five months for the 737 MAX 8, bearing eerie similarities to October's fatal Lion Air crash in Indonesia.

Anonymous reports by US pilots also showed incidents in which flight systems suddenly and inexplicably caused the aircraft to pitch downward.

Boeing said Wednesday it maintains total confidence in its 737 MAX aircraft but nevertheless supports the decision to ground the planes "out of an abundance of caution" while it works to find the cause of the crashes.

This story has been published from a wire agency feed without modifications to the text.