Defense Stock Roundup: Brexit Pulls Defense Stocks Down; LMT Scores; Aerojet Rocketdyne Realigns Units
Zacks Investment Research | Jun 27, 2016 11:39PM ET
The United Kingdom's vote to leave the European Union compelled Wall Street to digest its ”worst day in 10 months” on Jun 24, as the ripple effect was also felt across the Atlantic as well as in the global stock markets. The Brexit referendum took the markets by surprise and triggered a "sell first" attitude nearly across the board.
The S&P 500 Aerospace & Defense (Industry) index and Dow Jones U.S. Aerospace & Defense Index dropped 4.14% and 4.23%, respectively, in the last five trading sessions. Both the indexes dropped by more than 4% in the last two trading sessions alone. Boeing (NYSE:BA) suffered the greatest impact with its stock plunging more than 8% in the last two days. This may be because of its substantial commercial aerospace exposure. A high level of market volatility, however, led most defense stocks to trade in the red over the past five sessions.
Defense companies have nevertheless scooped up a number of Pentagon contracts in the past one week including those involving Foreign Military Sales (“FMS).
An Aerojet Rocketdyne unit announced yesterday that it expects to save $8 million annually by consolidating its six business units into two.
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