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August 26 Market Close: GovCon Index Down, US Stocks Mixed After Fed Chair’s Hawkish Rate Hike Outlook

GovConIndexDOWNExecutive Mosaic’s GovCon Index stumbled to negative in late morning trade Friday for a second straight weekly loss as U.S. stocks tried for gains shortly before the close after Federal Reserve Chair Janet Yellen told central bankers in Wyoming she believes the case has strengthened for another interest rate hike.

Friday’s close puts the GCI at a weekly decline of 0.44 percent and the latter U.S. stock bellwether index ends down 0.68 percent over five days.

Textron (NYSE: TXT) was the only GovCon Index-S&P 500 stock to close in green Friday, while 18 out of 30 GCI companies registered gains for the week with five advancers also included in the S&P 500.

Lockheed ended Friday as the GovCon Index’s both worst net and percentage performer and largest lagger of companies listed in both the GCI and S&P 500 to extend the defense contractor’s decline to 8.28 percent since it spun out the former technical services segment into Leidos Holdings (NYSE: LDOS) on Aug. 16.

GovCon Index-S&P 500 defense primes Northrop Grumman (NYSE: NOC), General Dynamics (NYSE: GD) and Raytheon (NYSE: RTN) also ended in the GCI’s bottom five for net decliners along with the military shipbuilder Huntington Ingalls Industries (NYSE: HII).

Science Applications International Corp. (NYSE: SAIC) — which derives 100 percent of sales from the federal government — added nearly a half-percent as the U.S. dollar climbed on speculation over the timing of the next rate hike.

Other primarily U.S.-oriented contractors ManTech International (Nasdaq: MANT), Vectrus (NYSE: VEC) and Engility Holdings (NYSE: EGL) ended in the GCI’s top five for net gainers.

BAE Systems PLC — which trades on U.S. over-the-counter markets — led all GovCon Index net performers after Berenberg Bank lifted its rating on the British defense contractor from “Hold” to “Buy” in a research note to investors.

All 10 S&P 500 sectors closed lower after Yellen told a central banker audience in Jackson Hole, Wyoming Fed policymakers should look for a “gradual” pace in future rate hikes with the next increase potentially next month as the U.S. central bank draws confidence from falling unemployment rates and increased price stability.

Futures traders have priced the odds of a September rate hike at 30 percent versus 21 percent on Thursday and 60.2 percent for a December move compared to 51.8 percent in the previous session, according to Reuters.

Market Summary

Index Value Net Change % Change
GovCon Index 81.205 -0.359 -0.440%
S&P 500 2, 169.04 -3.43 -0.16%
Dow Jones Industrial Average 18, 395.40 -53.01 -0.29%
NASDAQ 5, 218.92 +6.71 +0.13%
Advancing GovCon Index Issues 11
Declining GovCon Index Issues 19
Unchanged GovCon Index Issues 0

Lowest GovCon Index Net Performers

Symbol Company $ Current Price Net Change ▾ % Change
LMT Lockheed Martin * 244.44 -4.09 -1.65%
NOC Northrop Grumman * 211.93 -1.51 -0.71%
GD General Dynamics * 151.58 -1.10 -0.72%
HII Huntington Ingalls Industries 165.86 -0.89 -0.53%
RTN Raytheon * 140.92 -0.86 -0.61%

Lowest GovCon Index Percentage Performers

Symbol Company $ Current Price Net Change % Change ▾
I Intelsat 2.85 -0.25 -8.06%
LMT Lockheed Martin * 244.44 -4.09 -1.65%
NAV Navistar International 14.10 -0.16 -1.12%
CAE CAE 14.00 -0.15 -1.06%
OA Orbital ATK 74.46 -0.74 -0.98%

Top GovCon Index Net Gainers

Symbol Company $ Current Price Net Change ▴ % Change
BAESY BAE Systems 28.24 +0.42 +1.51%
SAIC SAIC 63.79 +0.32 +0.50%
MANT ManTech International 41.49 +0.20 +0.48%
VEC Vectrus 33.18 +0.18 +0.55%
EGL Engility Holdings, Inc. 30.17 +0.16 +0.53%

Top GovCon Index Percentage Gainers

Symbol Company $ Current Price Net Change % Change ▴
BAESY BAE Systems 28.24 +0.42 +1.51%
VEC Vectrus 33.18 +0.18 +0.55%
EGL Engility Holdings 30.17 +0.16 +0.53%
SAIC SAIC 63.79 +0.32 +0.50%
MANT ManTech International 41.49 +0.20 +0.48%

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