Executive Mosaic’s GovCon Index posted a second straight weekly loss despite recovering from Thursday’s steep 2.26% decline. The index, which tracks the stock performances of 30 major contractors, closed slightly higher at $5,375.43 (+0.37%) on Friday but lost 2.12% overall for the week. Its year-to-date gain is +15.14% from +20.34% two weeks ago.
Wall Street also suffered a broad selloff on Oct. 31 but staged a comeback to start November. The tech-heavy Nasdaq Composite and S&P 500 lost 1.5% and 1.4% for the week, while the blue-chip Dow Jones Industrial Average (-0.1%) tilted to the red zone.
GovCon Index Performance
Three GovCon Index constituents recorded stellar gains during the week but one had a forgettable performance. Leidos (NYSE: LDOS) and Tetra Tech (Nasdaq: TTEK) climbed +9.5% and +4.16% on Tuesday, while Parsons (NYSE: PSN) rose 4.73% mid-week. HII (NYSE: HII) plunged 26.16% to $184.96.
Leidos, the week’s top performer, advanced 8.45% in five days. In Q3 2024, the defense contractor’s revenue increased nearly 7% year-over-year to $4.19 billion, while net income reached $362 million compared to the $396 million net loss in Q3 2023. Besides reporting a $40.6 billion backlog at the quarter’s end, the company announced Wednesday a new $93 million contract to support Navy and Marine Corps weapons systems.
HII is the week’s worst performer. In the three months ending Sept. 30, 2024, the shipbuilder’s total revenues and net earnings declined 2.4% and 31.8% compared to the same quarter in 2023. HII’s president and CEO, Chris Kastner, said that a pending agreement with a Navy partner and late critical material deliveries from the supply chain impacted the quarterly results.
A developing event is the possible end to Boeing’s (NYSE: BA) seven-week union strike. The International Association of Machinists and Aerospace Workers members will vote on a new contract offer on Monday. If approved, the plane maker will focus on rebuilding the business.
Positive earnings season
Market analysts say the quarterly results of the ongoing earnings season have been positive. The collective growth rate of the S&P 500 companies could hit about 5%. Despite the uncertainty regarding the outcome of Tuesday’s U.S. presidential elections, the consensus is that the current bull market will continue because of solid economic fundamentals.
