Executive Mosaic’s GovCon Index closed higher Friday to end its fourth straight weekly gain as investors eyed defense stocks after President Donald Trump repeated his election campaign pledge to build up the military during a speech in Washington.
U.S. equities also posted narrow gains and the benchmark S&P 500 composite index ended the week in positive with Trump’s speech to Congress next week the next major point of attention for investors.
GovCon Index advancers outnumbered decliners by a 4-to-1 ratio as 10 of its 11 S&P 500 components moved green with Huntington Ingalls Industries (NYSE: HII) the GCI’s top overall net performer and McKesson Corp. (NYSE: MCK) the largest gainer among co-listed stocks.
Military shipbuilder Huntington Ingalls paced gains among the GCI’s major defense and government services prime contractors after Trump told the Conservative Political Action Conference his budget request will aim to facilitate one of the “greatest military buildups in American history” on the offensive and defensive fronts.
That speech aligns with Trump’s various pledges during the election campaign to increase U.S. defense spending and in particular the Navy‘s ship fleet size to 350, both of which have spurred traders to snap up shares in defense contractors since his Nov. 8 upset win.
The GovCon Index has climbed 17 percent since the election and Huntington Ingalls has surged 44 percent in that time.
HII’s gain Friday exceeded $2.00 and the Newport News, Va.-based company has recorded advances exceeding $1.00 in seven of the past nine trading sessions.
Eight other GCI companies gained more than $1.00 Friday: McKesson, CACI International (NYSE: CACI), Leidos Holdings (NYSE: LDOS), Orbital ATK (NYSE: OA), Northrop Grumman (NYSE: NOC), General Dynamics (NYSE: GD), Harris Corp. (NYSE: HRS) and Lockheed Martin (NYSE: LMT).
CGI Group (NYSE: CGI) tumbled at least $1.00 to lead five other GCI stocks lower on net performance, while KBR (NYSE: KBR) ended the session as the largest percentage drag after the global engineering services company reported a fourth quarter net loss.
Co-listed Textron (NYSE: TXT) closed $0.04 lower to $47.17 as the GCI’s sixth-lowest performer.
On a weekly basis, 11 of the GovCon Index’s 30 stocks registered gains with GCI-S&P 500 company Boeing the top percentage performer and the airplane maker hit a new 52-week high during the Friday session.
Financial shares fell 1 percent to lead four major S&P sectors lower Friday with utilities the top performer among the remaining seven.
Non-GovCon Index company DigitalGlobe (NYSE: DGI) closed 8 percent lower to $31.25 after the Earth imagery provider said it agreed to be acquired by Canada-based satellite and space technology maker MacDonald, Dettwiler and Associates for nearly $2.4 billion in a deal that also sees MDA assume $1.2 billion in debt.
Shares in Westminster, Colo.-based DigitalGlobe have traded 5Â percent higher since the Wall Street Journal first reported details of the negotiations during Feb. 17 trade.
MDA’s shares listed on U.S. over-the-counter markets fell 6 percent to $48.91 and its stock on the Toronto exchange tumbled 7 percent to C$64.00.
Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 93.338 | +0.625 | +0.674% |
| S&P 500 | 2,367.34 | +3.53 | +0.15% |
| Dow Jones Industrial Average | 20,821.76 | +11.44 | +0.05% |
| NASDAQ | 5,845.31 | +9.80 | +0.17% |
| Advancing GovCon Index Issues | 24 |
| Declining GovCon Index Issues | 6 |
| Unchanged GovCon Index Issues | 0 |
Top GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change ▴ | % Change |
|---|---|---|---|---|
| HII | Huntington Ingalls Industries | 216.98 | +2.63 | +1.23% |
| MCK | McKesson Corp. * | 150.85 | +1.88 | +1.26% |
| CACI | CACI International | 127.45 | +1.80 | +1.43% |
| LDOS | Leidos Holdings | 54.08 | +1.59 | +3.03% |
| OA | Orbital ATK | 91.85 | +1.42 | +1.57% |
Top GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change ▴ |
|---|---|---|---|---|
| LDOS | Leidos Holdings | 54.08 | +1.59 | +3.03% |
| VEC | Vectrus | 23.37 | +0.62 | +2.73% |
| CUB | Cubic Corp. | 52.90 | +1.00 | +1.93% |
| BAH | Booz Allen Hamilton | 35.92 | +0.58 | +1.64% |
| OA | Orbital ATK | 91.85 | +1.42 | +1.57% |
Lowest GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change ▾ | % Change |
|---|---|---|---|---|
| GIB | CGI Group | 47.08 | -1.01 | -2.10% |
| ACM | AECOM | 35.77 | -0.58 | -1.60% |
| KBR | KBR | 15.60 | -0.55 | -3.41% |
| CAE | CAE | 15.22 | -0.21 | -1.36% |
| ICFI | ICF | 51.45 | -0.15 | -0.29% |
Lowest GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change ▾ |
|---|---|---|---|---|
| KBR | KBR | 15.60 | -0.55 | -3.41% |
| GIB | CGI Group | 47.08 | -1.01 | -2.10% |
| ACM | AECOM | 35.77 | -0.58 | -1.60% |
| CAE | CAE | 15.22 | -0.21 | -1.36% |
| ICFI | ICF | 51.45 | -0.15 | -0.29% |
