Executive Mosaic’s GovCon Index added 1 percent Wednesday to record its best session in two months and close above 80 points for the first time since Sept. 12 with 29 out of 30 stocks in positive after the Federal Reserve left benchmark interest rates unchanged and signaled a potential move in December.
All of the GovCon Index’s top four and seven of the CGI’s 10 largest net advancers are S&P 500 companies as all 11 co-listed stocks closed green.
Defense primes Northrop Grumman (NYSE: NOC), Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA) and L-3 Communications (NYSE: LLL) led all GCI gainers with government services contractor CACI International (NYSE: CACI) fifth.
Armored truck manufacturer Navistar International (NYSE: NAV) closed as the GovCon Index’s top percentage performer and has surged 15.48 percent UBS lifted its price target on the stock Friday after the Volkswagen investment announced earlier in September.
Navistar shares traded at a volume of 2.8 million shares Wednesday to double the three-month average.
Newport News, Virginia-based shipbuilder Huntington Ingalls Industries (NYSE: HII) ended its three-day skid and that stock also doubled its three-month average volume during Wednesday trade.
BAE Systems PLC closed down 1.41 percent to $27.99 on U.S. over-the-counter markets to end as the GCI’s lone decliner Wednesday after Barclays Capital reiterated its “Underweight” rating on the British defense contractor’s stock, which fell 2.02 percent to $6.93 in London.
Barclays’ price target of $5.61 on BAE’s London-traded stock indicates a potential downside of 21.03 percent from Wednesday’s close.
Energy shares paced the S&P 500’s rise and 10 out of 11 sectors advanced after the Fed announced unchanged interest rates in a reversal from slight negative territory shortly before the central bank’s statement.
Fed policymakers indicated in its post-meeting statement a desire to see further evidence of labor market improvement and inflation objectives being met prior to a rate hike and welcomed “solid” jobs numbers in recent months.
Futures markets have priced in 64-percent odds of a move in December versus 58 percent prior to the Fed’s statement, according to Reuters.
Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 80.341 | +1.088 | +1.373% |
| S&P 500 | 2, 163.12 | +23.36 | +1.09% |
| Dow Jones Industrial Average | 18, 293.70 | +163.74 | +0.90% |
| NASDAQ | 5, 295.18 | +53.83 | +1.03% |
| Advancing GovCon Index Issues | 29 |
| Declining GovCon Index Issues | 1 |
| Unchanged GovCon Index Issues | 0 |
Top GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –´ | % Change |
|---|---|---|---|---|
| NOC | Northrop Grumman * | 215.85 | +3.74 | +1.76% |
| LMT | Lockheed Martin * | 243.82 | +3.34 | +1.39% |
| BA | Boeing * | 130.56 | +2.77 | +2.17% |
| LLL | L-3 Communications * | 149.71 | +2.62 | +1.78% |
| CACI | CACI International | 99.61 | +1.75 | +1.79% |
Top GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –´ |
|---|---|---|---|---|
| NAV | Navistar International | 22.45 | +1.70 | +8.19% |
| VEC | Vectrus | 28.36 | +1.09 | +4.00% |
| CSRA | CSRA * | 26.93 | +0.98 | +3.78% |
| I | Intelsat | 2.64 | +0.09 | +3.53% |
| BA | Boeing * | 130.56 | +2.77 | +2.17% |
