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Defense Stock Roundup: U.S.-North Korea Confrontation Boosts Sales

Fresh tensions broke out on the Korean border following North Korea’s launch of its first ballistic missile, capable of reaching the continental U.S., on 5th July. The U.S. defense stocks got a solid boost when, in retaliation, the U.S. and South Korean army jointly fired counter missiles on the very same day.

Further, U.S. Ambassador to U.N., Nikki Haley’s address surely gave a boost to investors’ optimism in the Aerospace-Defense space. During the speech, Haley had condemned North Korea’s action as ‘a clear and sharp military escalation’ against the U.S and indicated that the nation can and will use its militant force effectively to curb these threats if necessary.

As a result, major indices in this space saw an uptick over the trailing five trading sessions. While the S&P 500 Aerospace & Defense (Industry) Index rose 2.3%, the Dow Jones U.S. Aerospace & Defense Index grew 2.2% during this period.

Moreover, a generous flow of funds from the Pentagon also boosted growth in this industry. Among last week’s highlights, defense majors, Lockheed Martin Corp. LMT, Huntington Ingalls Industries, Inc. HII, Harris Corp. HRS and Northrop Grumman Corp. NOC, clinched a handful of contracts from the U.S. Department of Defense. Meanwhile, The Boeing Co. BA announced its delivery numbers.

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