The play of mixed factors has kept U.S. defense stocks afloat in the five trailing trading sessions, with limited upside in sight. While a generous flow of funds from the Pentagon and completion of the mega merger between Northrop Grumman and Orbital ATK boosted the U.S. aerospace and defense industry, the denuclearization deal at Singapore’s summit marred the expected growth rate.
In particular, shares of major U.S. defense contractors declined on Jun 12 following a conflict-free settlement of the denuclearization deal. Consequently, major indices of the Aerospace-Defense space — the S&P 500 Aerospace & Defense (Industry) index and the Dow Jones U.S. Aerospace & Defense index — inched up 0.6% in the last five trading sessions.
Moreover, defense majors like The Boeing Company (BA – Free Report) , Lockheed Martin Corp. (LMT – Free Report) , Northrop Grumman Corp. (NOC – Free Report) and General Dynamics Corp. (GD – Free Report) secured a few orders from the Department of Defense’s daily funding session. Also, Northrop Grumman’s Orbital ATK acquisition for $9.2 billion hit the headlines last week.
Recap of Last Week’s Key Stories
1. Boeing secured an $862.2 million modification contract for providing full-rate production of fifteen Lot 42 F/A-18E and three F/A-18F aircraft to the U.S Navy. The contract was awarded by the Naval Air Systems Command, Patuxent River, Maryland.
Majority of the work will be carried out in El Segundo, CA, St. Louis, MI and the rest would be performed in various locations across the United States. Work related to the deal is expected to be completed in June 2020 (read more: Boeing Wins $862M Navy Deal for the F/A 18 Aircraft).
2. Lockheed Martin’s Aeronautics division won a $735.7 million modification contract to support the F-35 Lightning II program. The contract was awarded by the Naval Air