Why defense stocks could keep soaring no matter who wins the election

Two defense stocks hit 52-week highs this week, and may be heading higher. In a time of international market volatility and global conflict, some analysts say defense contractors like And the future of defense spending, and of these stocks, may not depend on who wins the election in November. "I do think they will go higher," Gina Sanchez of Chantico Global said Tuesday on CNBC's "Trading Nation." "The fundamentals support them; the fundamentals are rather scary fundamentals. ... We have seen an increase in conflict around the world, and that has not only increased U.S. defense spending, but it's also increased spending by its allies." Sanchez noted that one-fifth of Lockheed Martin's earnings come from abroad. "And if you look at both candidates, [Hillary] Clinton is hawkish, and she's seen as likely supporting a strong military. And we know that [Donald] Trump is in favor of expanding the military, so I think the defense contractors on either side of that ticket are going to win." Lockheed Martin on Tuesday announced second quarter earnings of $3.32 per share, an increase of 11 percent year over year, beating analysts' expectations. L-3 Communications, a defense contractor that operates through Aerospace Systems, Electronic Systems, Communication Systems and National Security Systems segments, announces its second quarter earnings before the market opens Wednesday. In March, the defense contractor announced its first quarter diluted earnings of $2.08 per share versus $1.38 in the first quarter of Continue Reading

Dollar hits four-month high vs yen; stocks end flat

By Chuck Mikolajczak NEW YORK (Reuters) - The dollar hit a four-month high against the yen and global equity markets edged up on Tuesday as investors awaited testimony by Federal Reserve Chair Janet Yellen this week and any signs of tighter U.S. monetary policy. MSCI's measure of stock performance world-wide initially rose, lifted by expectations of robust global growth. U.S. stocks had a choppy session, hitting session lows after President Donald Trump's eldest son released an e-mail chain related to a meeting with a Russian lawyer linked to the Kremlin during last year's election campaign. Wall Street was then able to claw back its losses after the Senate announced a two-week delay to its August recess in order to work on legislation, giving investors hope the Republican agenda could be advanced. "It says to me there's a commitment to make some of the changes that the markets would like to see," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts. Europe's main bourses faltered despite a fresh flurry of M&A activity. The dollar initially edged higher against a basket of currencies before losing ground in the wake of the comments from Trump Jr. Interest rates are on the rise globally as the Fed is expected to tighten further this year, the Bank of Canada will likely raise rates this week, while comments suggest tighter European Central Bank policy and chatter from the Bank of England. Fed Board Governor Lael Brainard said she believed the U.S. central bank should begin unwinding its balance sheet soon, but she would want to "move cautiously on further increases in the federal funds rate" to help push inflation higher toward its target. Philadelphia Fed President Patrick Harker, a voter on the Federal Open Market Committee, also echoed Brainard's sentiment. The pan-European FTSEurofirst 300 index lost 0.68 percent and MSCI's gauge of stocks across the globe gained 0.14 percent. Continue Reading

Wall Street ends up but off highs after Trump announcement, Fed minutes

By Caroline Valetkevitch NEW YORK (Reuters) - U.S. stocks ended slightly firmer on Wednesday but off the day's highs as worries mounted over President Donald Trump's agenda and minutes from the latest Federal Reserve meeting suggested policymakers are worried about weak inflation. Indexes lost some ground following Trump's disbanding of two high-profile business advisory councils after two more CEOs resigned from the manufacturing council on Wednesday in response to his comments on weekend violence in Charlottesville, Virginia. Wall Street stayed volatile following the release of the last Federal Reserve meeting's minutes, which showed policymakers appeared increasingly wary about recent weak inflation. Some called for a halt to further interest rate hikes until it was clear the trend was transitory. "The reaction to the statement was mixed. Investors are worried inflation is not hitting the Fed's target and that the Fed may be tightening too early," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. At the same time, that could push out the next rate increase, which would be supportive to stocks, he said. Investors have been watching a slide in inflation readings in recent months, which remain below the Fed's 2 percent target. Fed policymakers unanimously decided to keep interest rates unchanged at their July 25-26 meeting. The S&P materials index rose the most of any sector, gaining 0.9 percent, following gains in copper and other metals. The Dow Jones Industrial Average rose 25.88 points, or 0.12 percent, to end at 22,024.87, the S&P 500 gained 3.5 points, or 0.14 percent, to 2,468.11 and the Nasdaq Composite added 12.10 points, or 0.19 percent, to 6,345.11. Trump announced the break-up of the advisory councils after 3M Co's Inge Thulin became the latest of several chief executives to leave Trump's American Manufacturing Council, and the president's Strategic and Continue Reading

Wall Street ends flat as politics drive stocks

By Kimberly Chin and Caroline Valetkevitch NEW YORK (Reuters) - U.S. stocks ended little changed on Tuesday in a session marked by knee-jerk reactions to events in Washington that drove investors to first worry then hope about prospects for the Trump administration's economic agenda. Stocks fell sharply in late-morning trading after emails disclosed by President Donald Trump's eldest son cited Russian support for his father's 2016 election campaign. The emails referred to a top Russian government prosecutor offering the Republican Trump campaign damaging information about Democratic rival Hillary Clinton. But the market recovered later as U.S. Senate Republican leader Mitch McConnell announced a two-week delay in the Senate's August recess to provide more time to work on legislation and approve nominees, signaling prospects of progress on the Republican agenda. "It's a play off hope. We had something that might be negative and now we have something that might be positive," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts. The Senate's delayed break "says to me there's a commitment to make some of the changes that the markets would like to see," while Trump Jr's email exchange could put more focus on the Russia-related investigations that have overshadowed the White House, he said. Uncertainty over whether the Trump administration would be able to push through its agenda this year has weighed on the market, especially after repeated delays in getting a new health care bill passed. The Dow Jones Industrial Average closed up 0.55 point to 21,409.07, the S&P 500 lost 1.9 points, or 0.08 percent, to 2,425.53 and the Nasdaq Composite added 16.91 points, or 0.27 percent, to 6,193.31. Among sectors, energy led gains, with a 0.5 percent increase, following gains in oil prices . Upcoming congressional testimony from Federal Reserve Chair Janet Yellen could shed light on the pace of U.S. monetary Continue Reading

Wall St. ends off session highs after fresh Russia probe reports

By Sinead Carew NEW YORK (Reuters) - U.S. stocks rose but closed below their session highs on renewed concerns about Donald Trump's presidency, after two new reports related to a federal investigation into possible coordination between Russia and Trump's election campaign. A senior White House adviser is a significant person of interest in the law enforcement investigation of possible Russian ties, the Washington Post reported on Friday, citing people familiar with the matter. Separately the New York Times reported that Trump told Russian officials at the White House that firing FBI Director James Comey relieved "great pressure" from the ongoing probe. The Times report cited a document summarizing the meeting. "I'm sure some of (the move) is related to that, and the fact that Trump is going to be out of the country and nobody's quite sure what he's going to do," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. He added, however, that the market did not seem too concerned as the major indexes were still in positive territory. "We've got two days now to wring our hands about what might happen," he said. Trump left on Friday for his first foreign trip since taking office, which the White House hopes will shift the focus away from domestic controversies. While Wall Street ended higher it failed to fully regain all the ground lost in Wednesday's big selloff after reports earlier this week that Trump tried to interfere in the federal investigation. Investors have been closely following events in Washington as they worry whether Trump will be able to fulfill campaign promises for fiscal stimulus and tax reform. Many investors saw the policy promises as a key reason for the post-election rally. The Dow Jones Industrial Average was up 141.82 points, or 0.69 percent, to 20,804.84, the S&P 500 had gained 16.01 points, or 0.68 percent, to 2,381.73 and the Nasdaq Composite had added 28.57 points, or 0.47 percent, to Continue Reading

As stocks hit records, Wall Street ponders next 10% dive

The spookiness factor has largely been absent from Wall Street. But that doesn’t mean investors should assume nothing can go wrong and that stocks won’t go down.It’s been 15 months since the Standard & Poor's 500 stock index had its last scare, a 14.2% dive at the start of 2016, according to CFRA, a Wall Street research firm. That broad market tranquility is reflected in a closely watched Wall Street “fear gauge,” which is on track to post its lowest average angst level for a 52-week period since its inception 27 years ago, according to State Street Global Advisors.That calm is also reflected in the lack of wild price swings.The broad market has closed up or down more than 1% only four times this year. That's well below the five-year average of 49 annual swings of more than 1%, according to S&P Dow Jones Indices.But now’s not the time for investors to get complacent. Stocks continue to hover at or near record highs despite unsettling political turmoil in Washington, unnerving geopolitical news and a market that is no longer cheap relative to corporate earnings. Wall Street has been pushing stock prices higher amid a rebounding global economy, robust profitability for U.S. companies, and hopes that President Trump can get his stimulative economic agenda enacted by U.S. lawmakers.Corrections, or drops of 10% or more, can strike at any time. And they occur more often than investors think. In fact, drops of this magnitude occur every 18 months, on average, according to Sam Stovall, chief investment strategist at CFRA. The good news is corrections are often short-lived and don't morph into full-blown bear markets, or declines of 20% or more.And while averages don’t always have the greatest predictive power (stocks, for example, enjoyed a correction-free period of nearly three-and-a-half years in the 2002-2007 bull market) the recent stretch of minimal turbulence Continue Reading

RadioShack stock jumps 16% to one-year high

Helped by its push into mobile phones and calling plans, electronics giant RadioShack said its latest quarterly sales were better than expected, propelling its stock up 16% to a one-year high.While profits were slightly below estimates, the sales stats revived confidence in a retail chain that's been hit by a pullback in consumer spending and tougher competition from the likes of Best Buy.The retailer recently signed a deal with wireless carrier T-Mobile USA and is now focusing more on selling both handsets and air time, as well as popular electronics products such as iPods.The retailer, which has about 4,470 company-operated stores, almost 1,300 dealer outlets and more than 450 wireless phone kiosks nationwide, said sales at its stores and kiosks open at least a year fell 2.9%.Net sales totaled $990 million, down 3.1% from the year-earlier level of $1.02 billion. Net income fell to $37.4 million from $49.1 million a year earlier.RadioShack stock closed at $18.15, up $2.49 or nearly 16%, far ahead of its previous 52-week high of $17.45 and nearly triple its 52-week low of $6.47. Join the Conversation: Continue Reading

Stocks fall on worries about financial sector

Stocks lost more ground in extremely volatile trading Monday, as investors recoiled at a cautious economic outlook from a Federal Reserve official and the possibility of more financial troubles of Fannie Mae and Freddie Mac. The market found only slight solace in retreating oil prices. San Francisco Federal Reserve President Janet Yellen said in a speech the financial markets remained fragile, and that it will take time for conditions to improve. "My expectation is that market functioning will improve markedly by 2009," she said. "But things could get worse before they get better." The comments added to concerns raised in a note by Lehman Brothers analysts that Fannie and Freddie may need to raise more capital as the credit crisis continues. Worries about the ailing financial sector deflated a stock rally early in the day that had been fueled by a $4-a-barrel pullback in oil prices. The market managed, however, to rebound from its lows of the day, when the Dow sank to its worst level since mid-August of 2006. Some investors bought back into the market to take advantage of the low prices. "The market is so skittish and so scared that half the people believe that this is just another leg of the down market and the other half believes that we're forming a bottom," said Frank Ingarra, assistant portfolio manager at Hennessy Funds. According to preliminary calculations, the Dow fell 56.58, or 0.50 percent, to 11,231.96. Over the course of the day, the blue chips rallied, tumbled, rebounded, and then fell once more. The Dow dropped as low as 11,120.74 — its lowest trading level since Aug. 15, 2006. Broader stock indicators also declined. The Standard & Poor's 500 index fell 10.59, or 0.84 percent, to 1,252.31, and the Nasdaq composite index fell 2.06, or 0.09 percent, to 2,243.32. The technology-dominated Nasdaq got a modest boost from Yahoo Inc., which rose $2.56, or 12 percent, to $23.91 after Microsoft Corp. expressed support for Continue Reading

Nike stock has wild ride, bounces back

Shares fell $1.06 to $57.26 after hitting a 52-week high of $60.99 earlier in the day. The stock price then gained back a quarter of the day's losses in after-hours trading. After the market closed Thursday, Nike reported a 51% rise in quarterly earnings to $569.7 million as revenues grew 11%. Officials also said they are exploring the sale of Nike's Bauer Hockey subsidiary, reviewing the Exeter Brands group and looking closely at adding new businesses, either grown from within or acquired. Other Nike-owned brands also under scrutiny, officials revealed, include Converse, Nike Golf, Cole Haan and Hurley. Join the Conversation: Continue Reading

Dow rockets to new high

The Dow and S&P 500 soared to record highs yesterday on brights spots in June's retail sales and a takeover battle for aluminum maker Alcan. A super day for stocks gave the Dow its biggest one-day percentage gain in nearly four years. It also marked a sharp contrast to the start of the week, when stocks fell sharply amid concerns that some hedge funds could succumb to ill-placed bets on the housing sector. But investors, heartened by signs of a happy and spending consumer, clearly decided to put some bets on the table. Though retail sales generally appeared to be crimped last month by higher gasoline prices and a tepid housing market, the overall reading wasn't as dour as some investors expected. The Dow shot up 283.86 to 13,861.73; easily topping its previous record close of 13,676.32 on June 4. The increase was the biggest percentage gain for the blue chip index since October 2003 and the biggest point gain since October 2002. The S&P 500 rose 28.94 to 1,547.70, above its record close of 1,539.18 set June 4. The Nasdaq gained 49.94, or 1.88%. Yesterday's gain was the biggest percentage increase since March. The last time it closed at around this level was Feb. 1, 2001. The index, bloated by the late 1990s tech boom, is nowhere near its closing record of 5,048.62, set in March 2000. Several reports from retailers beat Wall Street expectations - notably Wal-Mart. It had a 2.4% sales gain in June. "It's relief things weren't as bad as people expected," said investment chief Bill Schultz of Mc-Queen, Ball & Associates. "We're getting slower growth but not the fall-of-the-cliff economic scenarios," some investors predicted. Stocks also got a boost from mining company Rio Tinto's offer to buy Canadian aluminum producer Alcan for $38.1 billion. The offer topped a bid from Alcoa that Alcan's board rejected in May. Alcoa said after the closing bell that it is dropping its bid. Alcan rose $8.85, or 9.9%, to $98.45, after earlier hitting a Continue Reading