Weapons Companies’ Stocks Surge After Paris Attacks

Defense stocks rally on news of a new offensive against ISIS.

US Air Force F-35 fighter jetRex Features/AP Images


When the New York Stock Exchange opened Monday morning, less than three days after Islamic State terrorists attacked in Paris, five leading American weapons manufacturers saw their stock prices jump. Fox Business attributed the bump to a “reaction to the attacks in France.” Over the weekend, French President Francois Hollande had announced that his country would “lead a war which will be pitiless” against ISIS and launched a “massive” airstrike on its stronghold in Syria.

Shares of Lockheed Martin, known for its Hellfire missiles and its lead role in the troubled $1.5 trillion F-35 project, jumped 3.5 percent. Raytheon, manufacturer of Tomahawk missiles used in air strikes against ISIS, climbed 4.1 percent. Northrop Grumman, which in October landed a $55 billion deal to build the next stealth bomber, saw a 4.4 percent rise. Both General Dynamics, maker of F-16s, and Boeing, whose Small Diameter Bombs and Joint Direct Attack Munitions have been used in the air campaign against ISIS, ended the day with increases of 1.9 and 1.3 percent, respectively. On the first day of trading after the Paris attacks, the Dow Jones average rose slightly less than 1.5 percent.

The five companies’ stock continued to do well on Tuesday:

Change in stock price for Boeing (BA), Northrop Grummon (NOC), General Dynamics (GD), Raytheon (RTN), and Lockheed Martin (LMT) since November 13, the day of the Paris attacks Google Finance

Does likelihood of an expanded military response to ISIS signal a boom for the arms industry? Aerospace and defense industry analysts at Stifel, a brokerage and investment banking firm headquartered in Missouri, penned an industry update on Monday, writing that the Paris attacks are likely to lead to “stronger support for defense spending and ongoing operations in the Middle East.” Overall, that’s good news for defense contractors.

But historically, the real driver behind defense spending has been troop deployment, not political sentiment, Stifel notes, and support for redeploying American troops in the Middle East is scant. “We would be surprised to see any significant shift in strategy from President Obama and expect instead to see an acceleration and broadening of current efforts—an increase in aerial attacks and a possible increase in the number of special ops forces deployed,” the industry update noted. Nonetheless, “We view the most likely outcome as increased political support for defense spending and for national security/terrorism to become a greater focus of the 2016 election cycle dialogue, which is likely to create positive headlines for defense companies.”

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate