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Defense stocks tumble as market sells off and Trump talks North Korea and Iran with Macron

  • Shares of top defense companies fell Tuesday amid a broader market sell-off.
  • The stocks fell amid President Donald Trump's talks with French President Emmanuel Macron on defense issues such as the Iran nuclear deal and denuclearization of the Korean peninsula.
A Sikorsky helicopter lands near Marines with Fox Company, 2nd Battalion, 8th Marines, Regimental Combat Team 7, and Afghan National Security Forces provide security during Operation Nightmare in Nowzad, Afghanistan, June 6, 2013.
US Marine Corps photo
A Sikorsky helicopter lands near Marines with Fox Company, 2nd Battalion, 8th Marines, Regimental Combat Team 7, and Afghan National Security Forces provide security during Operation Nightmare in Nowzad, Afghanistan, June 6, 2013.

Top defense companies' shares declined Tuesday, erasing earlier gains, amid a broader market sell-off.

The S&P 500 Aerospace & Defense index, comprised of 13 manufacturers, closed down more than 3 percent.

The declines came while President Donald Trump discussed fraught international issues with French President Emmanuel Macron at the White House, such as the Iran nuclear deal, which faces a key deadline next month.

Trump also praised North Korea dictator Kim Jong Un as "honorable" and "open" as the two leaders pursue an unprecedented summit in May or June. Trump is seeking denuclearization of the hermit regime. The two delegations also discussed the recent strike on Syrian chemical facilities.

Individually, Lockheed Martin, the Pentagon's top weapons supplier, beat analysts' earnings expectations earlier in the day but closed down more than 6 percent at $336.49. Shares of Raytheon, meanwhile, hit an all-time high earlier Tuesday, but closed down more than 4 percent at $218.80.

"I would say that it is more market-oriented and maybe a little bit of industry weakness," Peter Arment, an aerospace and defense industry analyst at Baird, told CNBC. "We are not seeing anything in the earnings reports that warrants this kind of weakness."

Baird has assigned outperform ratings on Lockheed and Raytheon. The firm's price target for Lockheed was $410 a share as of Jan. 30, and $237 for Raytheon as of Jan. 26.

Boeing, the world's largest plane manufacturer, tumbled nearly 4 percent putting the defense giant well on the way to its worst day since April 6, when the company lost 3.06 percent.

Meanwhile, Northrop Grumman fell more than 3 percent while General Dynamics slipped 1.7 percent.

Arment said he expects positive earnings reports from Boeing, Raytheon and Northrop this week.

General Dynamics is also scheduled to report quarterly earnings later this week.