February 27 Market Close: GovCon Index Hits Record Close on Trump Military Budget Proposal

Executive Mosaic’s GovCon Index closed at an all-time record high Monday with large aerospace-and-defense primes the main contributors to gains after President Donald Trump unveiled his proposal to raise military spending 9 percent for the next federal fiscal year.

U.S. stocks also posted small gains as the benchmark S&P 500 composite index also hit record closing and intraday highs ahead of Trump’s address to a joint session of Congress Tuesday night with tax and regulatory policy key items of interest for Wall Street.

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GovCon Index advancers outnumbered decliners by a 5-to-1 ratio as 10 of its 11 S&P 500 components registered gains with co-listed Lockheed Martin (NYSE: LMT) the GCi’s top net performer overall.

GCI-S&P companies Lockheed, Northrop Grumman (NYSE: NOC), L3 Technologies (NYSE: LLL) and Boeing (NYSE: BA) all rose by at least $2.00 each after Trump’s comments to state governors at the White House on his plan for a “a historic increase in defense spending.”

Trump added he would disclose further details on his military budget and infrastructure plans during his address to Congress Tuesday, according to a Reuters report from the White House.

Large primes and other contractors with strong defense footprints have paced the GovCon Index to an 18-percent gain and successive record closes since Trump’s Nov. 8 election victory on investor anticipation of a military spending boost.

Six other GCI stocks posted gains of more than $1.00 Monday: Rockwell Collins (NYSE: COL), Orbital ATK (NYSE: OA), AECOM (NYSE: ACM), Raytheon (NYSE: RTN), Huntington Ingalls Industries (NYSE: HII) and Navistar International (NYSE: NAV).

Ten GovCon Index components hit 52-week highs during the session: Boeing, Huntington Ingalls, Lockheed, Orbital ATK, Raytheon, Rockwell Collins, General Dynamics (NYSE: GD), Harris Corp. (NYSE: HRS), Leidos Holdings (NYSE: LDOS), Science Applications International Corp. (NYSE: SAIC).

Services contractors ICF (Nasdaq: ICFI) and CGI Group (NYSE: GIB) closed as the GCI’s two largest net decliners on Trump’s proposal to finance the defense spending increase with cuts to civilian agencies such as the State Department and Environmental Protection Agency, both of which the companies hold various contracts with.

Energy stocks climbed 1 percent to lead five major S&P sectors lower with telecommunications the largest drag among the remaining six at a 1-percent decline.

Investors also weighed January durable good order data that showed a 1.8-percent increase for the month versus the 1.7-percent growth forecast but pending home sales tumbled 2.8 percent, CNBC reported.

Market Summary

Index Value Net Change % Change
GovCon Index 94.184 +0.846 +0.906%
S&P 500 2,369.73 +2.39 +0.10%
Dow Jones Industrial Average 20,837.44 +15.68 +0.08%
NASDAQ 5,861.90 +9.80 +0.28%
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
LMT Lockheed Martin * 269.36 +5.18 +1.96%
NOC Northrop Grumman * 248.60 +3.55 +1.45%
LLL L3 Technologies * 168.90 +2.51 +1.51%
BA Boeing * 179.43 +1.99 +1.12%
OA Orbital ATK 93.51 +1.66 +1.81%

Top GovCon Index Percentage Performers

Symbol Company $ Current Price Net Change % Change ▴
VEC Vectrus 24.37 +1.00 +4.28%
NAV Navistar International 27.80 +1.12 +4.20%
ACM AECOM 37.15 +1.38 +3.86%
EGL Engility Holdings 31.99 +0.99 +3.19%
BAH Booz Allen Hamilton 36.68 +0.76 +2.12%

Lowest GovCon Index Net Performers

Symbol Company $ Current Price Net Change ▾ % Change
GIB CGI Group 46.76 -0.32 -0.68%
MANT ManTech International 36.73 -0.19 -0.51%
HON Honeywell International * 124.89 -0.14 -0.11%
ICFI ICF 51.35 -0.10 -0.19%
LDOS Leidos Holdings 54.04 -0.04 -0.07%

Lowest GovCon Index Percentage Performers

Symbol Company $ Current Price Net Change % Change ▾
GIB CGI Group 46.76 -0.32 -0.68%
MANT ManTech International 36.73 -0.19 -0.51%
CAE CAE 15.19 -0.03 -0.20%
ICFI ICF 51.35 -0.10 -0.19%
HON Honeywell International * 124.89 -0.14 -0.11%

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