August 23 Market Close: GovCon Index Held Down By Large Primes Against US Stock Gains

Executive Mosaic’s GovCon Index traded lower against across-the-board gains by U.S. stocks Tuesday as declines by large prime defense contractors weighed on the GCI.

GovCon Index gainers edged laggers but only four of the GCI’s 11 S&P 500-listed stocks closed green as Lockheed Martin (NYSE: LMT) and Northrop Grumman (NYSE: NOC) ended as the two worst net and percentage performers of companies in both indices.

Lockheed’s stock stumbled to a fifth decline in six days and is down 6.28 percent since the spinoff and merger of the F-35 fighter jet maker’s former information technology and technical services business into Leidos Holdings (NYSE: LDOS) completed.

Bethesda, Maryland-based Lockheed hit a one-month low during intraday trade and Tuesday volume Lockheed totaled 7, 556, 774 shares to more than double the three-month average.

This current stretch of declines for Lockheed comes nearly a month after its stock fell 2.4 percent over eight days after the defense contractor said in its second quarter earnings statement that F-35 production had been subsidized by the company without a new contract

Defense News reported Aug. 12 that the Defense Department issued a $1 billion reimbursement for the Lot 9 jets to cover Lockheed’s costs.

Northrop shares also slid to a one-month low during the trading session and other notable GCI laggers included defense primes L-3 Communications (NYSE: LLL), Raytheon (NYSE: RTN), Boeing (NYSE: BA) and Huntington Ingalls Industries (NYSE: HII).

Leidos fell 27 cents to end its three-day gain streak after the merger’s closure to double in size from $5 billion to $10 billion in annual sales.

Orbital ATK (NYSE: OA) led net gainers after the aerospace company was upgraded to “Outperform” from “Market Perform” by Wells Fargo in a research note that cited potential catalysts from second quarter earnings and a September resupply mission to the International Space Station.

Dulles, Virginia-based Orbital ATK plunged 20.25 percent Aug. 10 to $70.79 Aug. 10 after the company said it would revise two years of financial results on accounting errors but has risen 7.4 percent since.

Eight out of 10 S&P 500 sectors advanced with materials the leader as the latter bellwether U.S. stock index recorded its 31st consecutive session without a close up or down of at least 1 percent with Fed Chair Janet Yellen’s Friday speech on the minds of many investors.

Market Summary

Index	Value	Net Change	% Change
GovCon Index	82.001	-0.273	-0.332%
S&P 500	2, 186.90	+4.26	+0.20%
Dow Jones Industrial Average	18, 547.30	+17.88	+0.10%
NASDAQ	5, 260.08	+15.48	+0.30%

Advancing GovCon Index Issues	17
Declining GovCon Index Issues	13
Unchanged GovCon Index Issues	0

Lowest GovCon Index Net Performers

Symbol	Company	$ Current Price	Net Change –¾	% Change
LMT	Lockheed Martin *	249.75	-4.45	-1.75%
NOC	Northrop Grumman *	214.50	-3.76	-1.72%
LLL	L-3 Communications *	147.08	-1.88	-1.26%
RTN	Raytheon *	141.18	-1.47	-1.03%
HII	Huntington Ingalls Industries	167.39	-1.07	-0.64%

Lowest GovCon Index Percentage Performers

Symbol	Company	$ Current Price	Net Change	% Change –¾
LMT	Lockheed Martin *	249.75	-4.45	-1.75%
NOC	Northrop Grumman *	214.50	-3.76	-1.72%
LLL	L-3 Communications *	147.08	-1.88	-1.26%
RTN	Raytheon *	141.18	-1.47	-1.03%
EGL	Engility Holdings	30.02	-0.23	-0.76%