NOC Northrop Grumman Corp Holding Co

By Doug Cameron 

U.S. defense stocks rallied in early trading 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 more than 6% in premarket trading, with Raytheon Co. and Northrop Grumman Corp. each about 4% higher.

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.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

November 09, 2016 09:42 ET (14:42 GMT)

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