Sunday 15 April 2018

THIS is what it is all about

Syria Airstrikes Instantly Added Nearly $5 Billion to Missile-Makers' Stock Value



15 April, 2018

Raytheon stock surged Friday morning, after 59 of the company’s Tomahawk missileswere used to strike Syria in Donald Trump’s first major military operation as President.
Trump ordered the airstrike on the Syrian government Thursday night in retaliation for a deadly chemical weapons attack on civilians earlier this week that killed as many as 100 people. The U.S. blamed the attack on the regime of Syrian President Bashar al-Assad.
The Tomahawk missile used in the strike is made by Raytheon (RTN, +0.49%), whose stock opened 2.5% higher Friday, adding more than $1 billion to the defense contractor’s market capitalization.
The shares of other missile and weapons manufacturers, including Boeing (BA, -2.45%)Lockheed Martin (LMT, -0.08%)Northrop Grumman (NOC, -0.40%) and General Dynamics(GD, +0.08%), each rose as much as 1%, collectively gaining nearly $5 billion in market value as soon as they began trading, even as the broader market fell
(All major U.S. stock market indexes dropped slightly in morning trading after the release of the weakest monthly jobs report in almost a year, which increased doubts about the strength of the American economy.)
The technology and equipment of the defense companies, which all have lucrative contracts with the U.S. government, was likely also used in Trump’s airstrikes on Syria. Lockheed Martin, for example, makes the Tactical Tomahawk Weapons Control System, one part of a three-pronged system needed to launch the missile; the product calculates the trajectory from a ship to the target. General Dynamics also makes technology used to fire Tomahawk missiles.
Boeing, meanwhile, makes other types of cruise missiles.
Defense contractor stocks have risen in the months since Trump was elected, spurred by his promises of a “historic” increase in U.S. military spending. The budget Trump proposed last month includes an additional $52 billion for the Department of Defense. Boeing stock has gained nearly 21% since the election, while General Dynamics stock is up 14% over the same period. (The S&P 500 has risen roughly 11% since election day.)

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