Defense Stocks Rise on Donald Trump Victory
November 09 2016 - 9:57AM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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