[Peace-discuss] Killing people makes money in Obama time

[C. G. Estabrook]

	Defense shares gain on spending boost in budget
	ATLANTA
	Mon Feb 1, 2010 5:25pm EST
Stocks

Lockheed Martin Corporation
LMT.N
$76.55
+1.66+2.22%
12:00am CST

The Boeing Company
BA.N
$61.94
+0.24+0.39%
2:00pm CST

Northrop Grumman Corporation
NOC.N
$58.18
+0.26+0.45%
2:00pm CST

ATLANTA (Reuters) - Shares of major U.S. defense contractors rose on Monday 
after the Obama administration unveiled a defense budget for fiscal 2011 that 
seeks a 3.4 percent increase in the Pentagon's base budget and $159 million to 
fund missions in Iraq, Afghanistan and Pakistan.

Hot Stocks

The Standard & Poor's Aerospace & Defense Index .GSPAERO gained about 1.5 
percent on Monday.

"In general it was better than we expected, across the board" in terms of the 
increases in the base budget as well as weapons procurement spending, said Craig 
Fraser, aerospace and defense analyst for debt rating service Fitch Ratings.

Among big names, industry leader Lockheed Martin Corp (LMT.N) gained 37 cents, 
or 0.5 percent, at $74.89 while aircraft maker Boeing Co (BA.N) rose 1.8 percent 
to $61.70. Northrop Grumman Corp (NOC.N), a provider of ships and unmanned spy 
planes, rose 2.3 percent to $57.92.

Sanford Bernstein analyst Douglas Harned said in a note to clients that Lockheed 
was likely to face "near term margin pressure" as it is forced to take on more 
development risks tied to the F-35 Joint Strike Fighter, the world's largest 
military aircraft program.

Defense Department Secretary Henry Gates said he would dock Lockheed $614 
million in performance fees because the F-35 program's performance had not met 
expectations over the past two years. Gates also replaced the Pentagon's manager 
in charge of the program.

General Dynamics Corp (GD.N) was up 3.9 percent at $69.43. Sanford Bernstein 
said the maker of tanks and ships stood to benefit from increased spending on 
the war in Afghanistan outlined in the budget.

Defense stocks were overshadowed in 2009 by U.S. defense program cuts and 
concern that spending growth will slow in coming years as the Obama 
administration looks to devote more resources to equip soldiers to fight insurgents.

"With the very large federal deficits that we're seeing over the next few years, 
there will continue to be some concern about defense spending," Fraser said.

Among other defense contractors, missile maker Raytheon Co (RTN.N) gained 1 
percent at $52.96, while L-3 Communications Holdings (LLL.N), a provider of 
systems that monitor and gather intelligence, rose 1.6 percent to $84.64.

Shares of Harris Corp (HRS.N), which has seen rising demand for its tactical 
radios that distribute voice and data in an encrypted form, climbed 4.2 percent 
to $44.74.

http://www.reuters.com/article/idUSTRE61061W20100201?type=globalMarketsNews

-- 
This message has been scanned for viruses and
dangerous content by MailScanner, and is
believed to be clean.