According to the Journal, Boeing and Embraer have been discussing a deal in which Boeing would pay a relatively large premium on Embraer's shares, but the parties are waiting to see if Brazil's government would approve such a deal.
Brazil-listed shares in Embraer shot up 21.3 percent after a brief halt in trading, and were trading at 20 reais ($6.06) by mid-afternoon.
Brazilian equities also rose on comments by Finance Minister Henrique Meirelles that temporarily warded off fears of a credit downgrade.
Speculation has swirled that major credit ratings agencies like S&P and Fitch, both of which give Brazil a BB, will downgrade Brazil's debt as the nation's legislators struggle to pass a pension legislation overhaul seen as key to shoring up the country's budget deficit.
However, Meirelles said he had not discussed a credit downgrade in recent meetings with S&P, Fitch and Moody's, adding that he had received no information suggesting such a move was imminent.
The Bovespa had popped 2.34 percent by mid-afternoon, with most of those gains coming after Meirelles' comments and the Embraer news.
The stock index was also aided by the performance of state-owned oil major Petroleo Brasileiro SA, known as Petrobras.
Shares in Petrobras shot up over 3 percent to 15.71 reais after the company unveiled an investment plan projecting $74.5 billion of capital expenditure from 2018 to 2022, slightly above projected investment for the 2017 to 2021 period.
In a note to investors, Itau BBA analyst Andr? S. Hachem called the company's plan to start up eight new platforms during that time "ambitious."