Market Insider

Gun-related stocks plunge on reports of slowing background checks

An attendee looks over rifle scopes at the National Rifle Association's (NRA) annual meetings and exhibits show in Louisville, Kentucky, May 21, 2016.
John Sommers II | Reuters

Shares of gun stocks Smith & Wesson and Sturm, Ruger & Company stumbled Friday on reports that a background check system run by the FBI showed slowing growth in May.

Smith & Wesson, which designs, manufactures and sells firearms, fell more than 7 percent into the closing bell. Meanwhile, Sturm, Ruger's stock was down more than 4.8 percent.

Background checks from the National Instant Criminal Background Check System rose 2.6 percent in May versus 14.4 percent in April, according to StreetAccount. May background checks were reported 942,970 in May versus 918,710 in the prior year.

Art and Diana Ramirez of Austin with their pistols in custom-made holsters during and open carry rally at the Texas State Capitol on January 1, 2016 in Austin, Texas. On January 1, 2016, the open carry law takes effect in Texas, and 2nd Amendment activists hold an open carry rally.
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The National Instant Criminal Background Check System, or NICS, is a U.S. system that determines if buyers match the name and birth year of a person who is not eligible to own firearms or explosives.


Shares of Sturm, Rugers & Company have gained roughly 8 percent year-to-date. The stock traded near $64 dollars Friday, down from a 52-week high of $78.09.

Smith & Wesson traded near $23 dollars per share. The stock is up more than 3 percent this year, and nearly 50 percent year-over-year.