Defense stocks Lockheed Martin (LMT) and Northrop Grumman (NOC) rose Thursday and the Dow climbed back following a more than 800-point drop as Russia invaded Ukraine.
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The Ukrainian cities of Kyiv, Odessa, Kharkiv and Mariupo reportedly came under a coordinated attack by Russia. President Vladimir Putin announced a “special military operation” was underway to bring down the government of Ukraine and demilitarize the country.
U.S. defense officials believe that Russian forces are advancing closer to Kyiv.
Russia launched over 160 missiles as part of the invasion, a senior U.S. defense official told reporters Thursday. The missiles were mostly short-range ballistic missiles but also included medium-range cruise missiles, surface-to-air missiles and sea-launched missiles.
U.S. officials estimate that as many as 50,000 civilians could eventually be killed or wounded in the conflict. Thousands of Ukrainians have already fled the country.
Following the attacks, at least 57 people were killed and 169 injured, according to Ukraine’s Minister of Healthcare Viktor Lyashko.
Defense Stocks
The invasion sent the Dow Jones Industrial Average tumbling early Thursday after the market moved into a correction Wednesday on Russia-Ukraine fears. But the Dow closed up more than 90 points. Defense stocks moved to close higher Thursday.
The iShares U.S. Aerospace & Defense ETF (ITA) rose 2.8% to close at 104.49. Boeing (BA) finished 1% higher at 198.43, after falling earlier in trading amid commercial aviation concerns. The Federal Aviation Administration, extended its no-fly range for U.S. carriers to cover all of Ukraine, Belarus and parts of western Russia.
No American troops are in Ukraine, but the U.S. military is actively supporting NATO allies in the region. President Biden said Tuesday that U.S. troop repositionings in Europe were “defensive moves.”
Defense Secretary Lloyd Austin ordered the deployment of 7,000 additional troops to Europe on Thursday, according to a senior defense official.
The U.S. Air Force is moving two Lockheed F-35s each from Germany to Estonia, Lithuania and Romania as part of a NATO mission to patrol the Black and Baltic Seas, according to a senior U.S. defense official.
Lockheed shares closed up 1.8% to 395.71 on the stock market today. Shares rose as high as 398.27 intraday. LMT stock is above a 395.70 buy point in a cup with handle base with a 395.70.
The U.S. is also moving Boeing-made Apache attack helicopters into Poland and the Baltics.
Last week the State Department granted approval for general Dynamics to sell $6 billion worth of M1 Abrams tanks to Poland.
General Dynamics shares closed up 1% to 218.53. GD stock is holding above a 209.18 cup-with-handle buy point and its 50-day line.
Space Is A Contested Space
The U.S. military has long warned that a war on Earth could extend into space, putting GPS, communications and other crucial services at risk. So far, U.S. officials have said that current U.S. space-based capabilities remain fully functional.
But Biden warned Russia in a speech Thursday that new sanctions from the U.S. and Western allies would “cut off more than half of Russia’s high-tech imports.”
“We’ll strike a blow to their ability to continue to modernize their military. It will degrade their aerospace industry, including their space program.”
Russia and the U.S. are highly interdependent on each other in space, and not just at the International Space Station. Northrop’s Antares rocket uses a Russian-made engine as well as United Launch Alliance’s Atlas V rocket. United Launch Alliance is a joint venture between Lockheed and Boeing.
Russia worried officials in November when it destroyed a satellite in a test that scattered debris that could have hit the ISS.
Northrop shares closed up 2.4% to 395.49 after running up to 402.90 intraday. NOC stock is forming a flat base with a 408.97 entry point.
The defense contractor is also a major subcontractor on Lockheed’s F-35 and produces drones such as the Global Hawk.
More broadly, Russia’s Ukraine invasion and other geopolitical risks raise the possibility of more defense spending by the U.S. and allies in the years to come.
Follow Gillian Rich on Twitter at @GillianRich_ for defense news and more.
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Source: https://www.investors.com/news/defense-stocks-in-focus-as-u-s-military-takes-defensive-moves-amid-russia-ukraine-invasion/?src=A00220&yptr=yahoo