December 14 Market Close: GovCon Index, US Stocks Turn Lower After Rate Hike Announcement

Executive Mosaic’s GovCon Index turned from neutral to negative territory Wednesday as did the U.S. stock bellwether S&P 500 composite index after the Federal Reserve raised interest rates for only a second time since the 2008 financial crisis.

GovCon Index decliners outnumbered gainers by a 9-to-1 ratio as three of its 11 S&P 500 components closed green with co-listed McKesson Corp. (NYSE: MCK) the GCI’s largest overall laggard.

Wednesday’s decline represents the S&P 500’s worst one-day plunge since October.

Government consulting contractor ICF (Nasdaq: ICFI) registered the GCI’s biggest percentage decline and second-largest net loss after William Blair downgraded its rating on the stock to “Market Perform” from “Outperform.”

Eight GovCon Index stocks shed at least $1.00 each with Boeing (NYSE: BA) down by more than $2.00.

GCI-S&P 500 company Lockheed Martin (NYSE: LMT) led all GCI gainers after a two-day decline of 3.02 percent on investor reaction to President-elect Donald Trump’s Twitter post to criticize the F-35 program’s costs.

Fellow defense contractors Raytheon (NYSE: RTN) and Cubic Corp. (NYSE: CUB) also advanced.

The Fed confirmed market expectations of a 25-basis point hike to the 0.5-0.75 percent range and increased its forecast of 0.25-point increases in 2017 from two to three, which the Fed expects to be followed by three boosts in both 2018 and 2019 before a long-run 3 percent.

According to Reuters, many traders were surprised by the Fed’s latest rate hike projection and believe markets are pricing in a favorable scenario with expectations of tax cuts and domestic spending increases by Trump.

Policymakers based their rate increase forecasts on an outlook of quicker economic growth, lower unemployment and inflation slightly below the Fed’s 2-percent goal.

Information technology was the lone S&P 500 sector out of 11 to advance with real estate the largest decliner.

Market Summary

Index Value Net Change % Change
GovCon Index 88.185 -0.772 -0.868%
S&P 500  2, 253.28 -18.44 -0.81%
Dow Jones Industrial Average 19, 792.53 -118.68 -0.60%
NASDAQ 5, 436.67 -27.16 -0.50%
Advancing GovCon Index Issues 4
Declining GovCon Index Issues 26
Unchanged GovCon Index Issues 0

Lowest GovCon Index Net Performers

Symbol Company $ Current Price Net Change ▾ % Change
MCK McKesson Corp. * 143.37 -4.60 -3.11%
ICFI ICF 53.50 -3.80 -6.63%
BA Boeing * 154.47 -2.19 -1.40%
EGL Engility Holdings 33.86 -1.62 -4.57%
HON Honeywell International * 116.51 -1.58 -1.34%

Lowest GovCon Index Percentage Performers

Symbol Company $ Current Price Net Change % Change ▾
ICFI ICF 53.50 -3.80 -6.63%
EGL Engility Holdings 33.86 -1.62 -4.57%
NAV Navistar International 29.73 -1.21 -3.91%
MCK McKesson Corp. * 143.37 -4.60 -3.11%
BAESY BAE Systems 29.66 -0.74 -2.43%

Top GovCon Index Net Performers

Symbol Company $ Current Price Net Change ▴ % Change
LMT Lockheed Martin * 252.30 +0.61 +0.24%
NOC Northrop Grumman * 232.10 +0.54 +0.23%
RTN Raytheon * 142.84 +0.43 +0.30%
CUB Cubic Corp. 49.75 +0.05 +0.10%

Top GovCon Index Percentage Performers

Symbol Company $ Current Price Net Change % Change ▴
RTN Raytheon * 142.84 +0.43 +0.30%
LMT Lockheed Martin * 252.30 +0.61 +0.24%
NOC Northrop Grumman * 232.10 +0.54 +0.23%
CUB Cubic Corp. 49.75 +0.05 +0.10%

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