Defense Companies Rally After Trump Remarks…Defense Stocks Surge
An M270 Multiple Launch Rocket System (MLRS) is assembled at Lockheed Martin's weapons plant, Thursday, March 14, 2024 in Camden, Arkansas. (AP Photo/Tara Copp)
Modest overall moves on Wall Street Thursday masked strong gains beneath the surface, particularly among companies that manufacture weapons and other military equipment.
The S&P 500 edged up just 0.53 points, or less than 0.1%, to 6,921.46, rebounding after its first loss in four days.
The Dow Jones Industrial Average rose 270.03 points, or 0.6%, to 49,266.11.
The Nasdaq composite fell 104.26 points, or 0.4%, to 23,480.02.
Shares of defense contractors rallied after President Trump said he wants to increase U.S. military spending to $1.5 trillion by 2027, up from $901 billion, as part of his plan to build what he called a “Dream Military.” L3Harris Technologies jumped 5.2%, Lockheed Martin climbed 4.4%, and Northrop Grumman gained 2.4%. The stocks rebounded after losses a day earlier, when Trump criticized defense contractors for producing military equipment too slowly.
RTX drew particular criticism and lagged behind its peers, rising just 0.8% after Trump said it was the slowest to increase production. Trump also signed an executive order Wednesday directing the Pentagon to ensure future defense contracts include provisions barring companies from buying back their own stock during periods of underperformance on U.S. government contracts.
Another winner on Wall Street was Constellation Brands, which surged 5.3% after reporting quarterly profits that topped analysts’ expectations. Those gains helped offset declines among several technology stocks that weighed on the broader market. Nvidia was the biggest drag on the S&P 500, falling 2.2% and giving back some of its nearly 40% gain from last year.
Oil prices also jumped, continuing recent volatility. U.S. benchmark crude rose 3.2% to $57.76 per barrel, while Brent crude climbed 3.4% to $61.99 a barrel.
In the bond market, Treasury yields moved higher following mixed economic data. Applications for U.S. unemployment benefits rose last week, signaling potential increases in layoffs but largely matching expectations. Other reports showed stronger-than-expected productivity gains over the summer and an unexpected narrowing of the U.S. trade deficit in October.
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