Executive Mosaic’s GovCon Index plunged 1 percent Tuesday to post its worst one-day performance in two months with all 30 companies in red at the close as U.S. financial markets entered sell-off mode on investor worries over dim third quarter corporate earnings and the fast pace of inflation.
Six of the GovCon Index’s 10 lowest net performers came from the S&P 500 as the latter U.S. bellwether index registered its biggest loss in one month with healthcare and financial stocks the largest laggers.
Eighteen GovCon Index companies shed at least $1.00 with three down by at least $2.00.
General Dynamics (NYSE: GD) contributed the biggest loss to the GovCon Index and Boeing (NYSE: BA) tumbled after the airplane maker said it could take a charge on its commercial space transportation program for NASA as early as the third quarter.
Boeing has delayed the first flight of its CST-100 Starliner capsule by six months to mid-2018 due to cost-related issues, according to the Wall Street Journal.
NASA awarded a pair of contracts to Boeing and Elon Musk’s SpaceX in September 2014 for the program.
KBR (NYSE: KBR) ended as the GCI’s worst percentage performer after Goldman Sachs downgraded the stock to a “Sell” rating from “Neutral” with a $15 price target on concerns about earnings growth prospects due to “outsized exposure” in the core liquified natural gas and greenfield ammonia sectors.
Goldman Sach issued its new rating on KBR nearly a week after the Houston-based engineering services provider received dual upgrades from Johnson & Rice and Deutsche Bank on moves to diversify the business mix through two acquisitions of two government services contractors this year.
Non-GovCon Index company DigitalGlobe (NYSE: DGI) declined 17 cents to $26.69 on a day when the satellite imagery provider said it agreed to purchase geospatial intelligence services contractor The Radiant Group for $140 million.
Third quarter earnings reports from Alcoa and Illumina missed Wall Street’s expectations and the U.S. dollar rose as traders heightened their expectations that the Federal Reserve will raise interest rates in December.
Futures markets have the odds of a December move at 68 percent versus 50 percent two weeks ago, Bloomberg reported.
Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 79.164 | -1.102 | -1.372% |
| S&P 500 | 2, 136.73 | -26.93 | -1.24% |
| Dow Jones Industrial Average | 18, 128.66 | -200.38 | -1.09% |
| NASDAQ | 5, 246.79 | -81.89 | -1.54% |
| Advancing GovCon Index Issues | 0 |
| Declining GovCon Index Issues | 30 |
| Unchanged GovCon Index Issues | 0 |
Lowest GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –¾ | % Change |
|---|---|---|---|---|
| GD | General Dynamics * | 149.60 | -3.29 | -2.15% |
| HII | Huntington Ingalls Industries | 154.14 | -2.15 | -1.38% |
| BA | Boeing * | 133.74 | -2.10 | -1.55% |
| CACI | CACI International | 100.85 | -1.71 | -1.67% |
| MCK | McKesson Corp. * | 163.63 | -1.70 | -1.03% |
Lowest GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –¾ |
|---|---|---|---|---|
| KBR | KBR | 15.01 | -1.25 | -7.69% |
| ACM | AECOM | 27.82 | -1.03 | -3.57% |
| CUB | Cubic Corp. | 44.64 | -1.60 | -3.46% |
| BAESY | BAE Systems | 26.325 | -0.735 | -2.716% |
| TXT | Textron * | 37.90 | -0.96 | -2.47% |
