Report
from last year - see who instantly benefits from airstrikes
Raytheon
stock surged Friday morning, after 59 of the company’s Tomahawk
missiles were 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,
+1.48%), 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, +0.83%), Lockheed Martin (lmt, +1.04%), Northrop Grumman (noc,
+0.58%) and General Dynamics (gd, +0.25%), 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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