Will Afghanistan Surge Make Defense Stocks Surge Too?
All twelve of the S&P 500 Aerospace and Defense stocks were trading up this morning on the news that President Obama has decided to expedite the deployment of 30,000 troops to Afghanistan. Will the trend continue?
Since the markets reopened after the terrorist attacks of 9/11, the S&P Aerospace & Defense subindustry (part of the Industrials Sector) has significantly outperformed the broader S&P 500 Index, up over 75% in the past 8 years compared to a 1% gain for the S&P 500.
% Change Since 9/11
Even with the planned drawdown in Iraq, the group has continued to do well. As of 10:00 AM this morning, the group was up over 1.5% indicating that investors believe there may be more upside. Leading the pack today is Precision Cast Parts , maker of complex metal components and products. Of the group, only Lockheed Martin is down for the second half of 2009 and for the year as well.