Defense firms see shares rise after Pentagon budget plan is detailed
Major U.S. weapon makers watched their shares tick upward in trading Monday after the announcement of the Pentagon’s budget plan.
Defense Secretary Chuck Hagel outlined details on the fiscal 2015 budget request, which shielded large, big-ticket programs and slashed older weapon systems.
Largely untouched by the budget plan is the F-35 Joint Strike Fighter made by Lockheed Martin Corp. The nearly $400-billion program to buy 2,400 of the jets has been under development for more than a decade.
Lockheed shares, which hit an all-time high at one point during trading, closed up $1.81, or 1.1%, at $166.14.
The radar-evading F-35 is assembled in Fort Worth, but many of its parts come from Southern California. Northrop Grumman Corp. builds the plane’s fuselage in Palmdale.
At the same facility, Northrop puts together the high-flying, long-endurance RQ-4 Global Hawk drone now set to replace the U-2 spy plane.
Northrop, which has about 2,500 employees on the program in Southern California, won out on the Pentagon’s fiscal 2015 plan because it reversed 2014’s proposal to mothball a version of the Global Hawk in favor of keeping the U-2 flying.
Northrop saw its stock go up $1.65, or 1.4%, to $122.12.
Hagel also stressed the importance of the new refueling tanker being built by Boeing Co. The Air Force depends on the tankers all over the world to refuel bombers, fighters and cargo planes in midair beyond America’s shores.
Boeing’s shares rose $1.31, or 1%, to $129.59.
Hagel said the Navy would have no new contract negotiations beyond 32 Littoral Combat Ships, which are being built by Lockheed and General Dynamics Corp. Previously, the Navy indicated plans to buy 52.
But 11 ships -- half of the Navy’s cruiser fleet -- would be modernized with more capabilities. That may mean work for General Dynamics. The company’s stock rose $1.31, or 1.2%, to $108.76.
The shares of another big shipbuilder, Huntington Ingalls Industries, went virtually unchanged, falling a penny to $98.09.
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