CHICAGO (Reuters) – Boeing Co (BA.N), the world's No. 2 planemaker, will accelerate planned increases of two of its popular widebody planes to accommodate heightened demand from recovering airlines that had curbed orders in the last two years amid an economic downturn, the company said on Friday.

Boeing had hinted at the acceleration previously, but confirmation of the improved market outlook sent shares 2.23 percent higher to $72.45. Shares of the company, a Dow component, notched a 21-month high on Friday.

"Market improvement and our conservatively managed approach to production have put us in a position where we see it necessary to raise aircraft output," said Boeing Commercial Airplanes Chief Executive Jim Albaugh, in a statement.

Boeing said it sees 2010 as a year of economic recovery and that airlines are likely to return to profitability in 2011.

Boeing, which is boosting rates on its 777 aircraft to seven per month from five per month, will make that change in mid-2011 rather than early 2012 as originally planned.

The company also plans to increase the rate of its 747 production to two airplanes per month from the current 1.5 planes. That increase will take effect in mid-2012 rather than mid-2013.

The global airline industry has been battered by an economic downturn that drained travel demand and caused some carriers to postpone or cancel airplane orders humidifiers. But evidence is mounting that the industry has weathered the worst of the storm.

The International Air Transport Association last week cut its estimate of the 2009 industry loss to $9.4 billion from December's $11 billion and said airlines are recovering strongly from the crisis, as passengers, freight and pricing power return.

"We're awash in news that the commercial aerospace outlook is improving," said Alex Hamilton, senior aerospace analyst at C.K. Cooper & Co.

"The demand is coming back," Hamilton said. "We're seeing traffic improve."

He said the improved industry outlook also reduces the chance that Boeing will need to cut production rates on its hot-selling single-aisle 737 plane.

Boeing, which gets paid when it delivers aircraft, said the production rate for the two wide-bodied would not affect 2010 financial results.

(Reporting by Kyle Peterson; Editing by Lisa Von Ahn, Dave Zimmerman)

Boeing speeds production boosts on market outlook

WASHINGTON – The current account trade deficit widened in the fourth quarter, reflecting an improving economy, but the imbalance for all of 2009 fell to the lowest point in eight years. Economists believe the deficit will increase in 2010 but not return to the record heights seen before the recession.

The Commerce Department said Thursday the deficit in the October-December quarter jumped 12.9 percent to $115.6 billion, as imports of oil, autos and other foreign products outpaced the gains in U.S. exports.

For the year, the deficit in the current account plunged by 40.5 percent to $419.9 billion, the smallest imbalance since 2001. Last year's deficit represented 2.9 percent of the total U.S. economy, the smallest percentage in 11 years.

The current account is the broadest measure of trade because it includes not only trade in goods and services, which are tracked by the government on a monthly basis, but also investment flows between countries. The figure is closely watched by economists because it is a measure of how much the country must borrow from foreigners to finance its balance of payments imbalance.

As America's current account deficit soared to an all-time high of $803.5 billion in 2006, which represented 6 percent of total GDP. That raised alarm bells over whether foreigners would continue to be willing to finance America's huge trade deficits. Now the bigger concern is over foreigners' willingness to purchase U.S. Treasury securities to finance America's soaring budget deficits.

Economists predict that the current account deficit will continue to widen this year but will not climb back to the previous record levels. They think that a weaker dollar will continue to boost U.S. exports. A weaker dollar makes U.S. goods more competitive in overseas markets and foreign goods more expensive for U.S. consumers.

For the fourth quarter, U.S. goods exports rose 8.8 percent to $263.6 billion with increases in shipments of autos, industrial supplies and farm products increases as an improving global economy boosted demand in key foreign markets guaranteed approval cash advance loans.

But the rebound in the U.S. economy increased demand for imports as well. Goods imports rose in the fourth quarter by 9.2 percent to $432.4 billion, led by big gains in petroleum, capital goods, autos and auto parts and consumer goods.

The deficit in goods of $145.5 billion in the fourth quarter was offset somewhat by a $36.5 billion surplus in services trade, items such as transportation and financial services. The United States had a $25.1 billion surplus on investment flows and a deficit of $31.8 billion in a category known as unilateral transfers, which covers such things as foreign aid.

The country's largest deficit with an individual country is the imbalance with China, which stood at $226.8 billion last year.

Lawmakers in both the House and Senate sought to increase the pressure this week on China to allow its currency to rise in value against the dollar.

U.S. manufacturers contend that China is violating global trade rules by holding down the yuan's value against the dollar to make Chinese goods cheaper in the United States and American products more expensive in China. They contend that the yuan is undervalued by as much as 40 percent.

A group of 14 U.S. senators unveiled legislation Tuesday that would provide for penalty tariffs to be imposed on Chinese imports if China does not allow its currency to rise in value while 130 House members sent a letter to the administration Monday urging a tougher approach.

The Obama administration is hoping China will allow its currency to rise in value against the dollar as a way of narrowing the trade gap but Chinese Premier Wen Jiabao said Sunday that such efforts amounted to a kind of trade protectionism.

Current account deficit rises to $115.6B in 4Q