North Korean threats lift defense stocks

By DefenseFOXBusiness

Trump to North Korea: Get your act together

President Trump tells North Korea to get “their act together’ or it will be in trouble ‘like few nations have ever been.’

Defense stocks including Lockheed Martin (NYSE:LMT) rallied this week amid escalating threats from North Korea.

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Lockheed Martin, Northrop Grumman (NYSE:NOC) and Raytheon (NYSE:RTN) each recorded new all-time highs on consecutive days Wednesday and Thursday, as President Donald Trump vowed to respond to any North Korean threats with “fire and fury.”

Lockheed has advanced 2.5% during the first four sessions of the week. Raytheon, known for the Tomahawk and Patriot missiles, is up 2.7%. Northrop Grumman has climbed 0.7%. L3 Technologies (NYSE:LLL), which provides intelligence and surveillance systems, jumped 4.1%.

Multiple defense contractors told FOX Business that customers are showing more interest in missile defense systems. Shares of Kratos Defense & Security Solutions (NASDAQ:KTOS), a supplier of target systems and missile targets that simulate threats, has surged 9.4% this week.

The industrial giants that make fighter jets, weapons and other military equipment have been on a tear since Trump’s Election Day victory. The PowerShares Aerospace & Defense ETF (NYSE:PPA) has gained 25.3% since Trump won the 2016 election, as investors banked on new spending on the U.S. military.

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Tensions between North Korea and the U.S. have reached a boiling point. North Korea has conducted multiple ballistic missile tests this year, and U.S. officials now believe the Kim regime can make a miniaturized nuclear warhead. In recent days, North Korea has dismissed Trump’s warnings and threatened to attack the waters near Guam.

Trump’s latest warnings to North Korea came in a speech Thursday, and the broader market swiftly retreated on renewed concerns over a potential conflict.

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