Defense Stocks Rise on Donald Trump Victory -- Update
November 09 2016 - 5:21PM
Dow Jones News
By Doug Cameron
U.S. defense stocks rallied Wednesday as the prospect of a
short-term bump in military spending from the incoming Trump
administration outweighed concerns about a possible hit to export
sales.
Republican control of Congress is expected to pave the way for
an increase in the Pentagon's war fund to tackle conflicts in the
Middle East, though President-elect Donald Trump hasn't laid out
plans for how he would fund pledges to boost the size of the Army,
expand the Navy fleet or add more combat jets.
Lockheed Martin Corp. shares gained 6%. Raytheon Co. added 7.5%,
and Northrop Grumman Corp. advanced 5.4%, as both hit all-time
highs. Huntington Ingalls Industries Inc. led the charge with a
rise of 11.4%.
Both main presidential candidates had championed further
single-digit increases in the domestic military budget, with Mr.
Trump pushing for U.S. allies to boost their spending. Analysts
have expressed concern that his election could hit American defense
exports, notably to Islamic nations.
Publicly, defense executives largely steered clear of election
commentary to champion the need for increases and stability in
spending, with the Pentagon likely to work under temporary budgets
until early next year.
Defense executives met with Mr. Trump in June through the
Aerospace Industries Association, their main trade group, which
Wednesday emphasized the need for more stability in setting
military budgets.
Republican control of Congress also is expected to accelerate
the push for faster reforms of the way the Pentagon buys weapons,
analysts said.
Boeing Co, which derives a third of its sales from defense,
ended 2% higher. Analysts questioned whether it would be able to
tie up a proposed 100-jet sale to Iran before the end of the year,
given the president-elect has pledged to make over the nuclear
treaty that paved the way for the plane maker to open talks. Boeing
declined to comment.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
November 09, 2016 18:06 ET (23:06 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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