Executive Mosaic’s GovCon Index turned from neutral to negative territory Wednesday as did the U.S. stock bellwether S&P 500 composite index after the Federal Reserve raised interest rates for only a second time since the 2008 financial crisis.
GovCon Index decliners outnumbered gainers by a 9-to-1 ratio as three of its 11 S&P 500 components closed green with co-listed McKesson Corp. (NYSE: MCK) the GCI’s largest overall laggard.
Wednesday’s decline represents the S&P 500’s worst one-day plunge since October.
Government consulting contractor ICF (Nasdaq: ICFI) registered the GCI’s biggest percentage decline and second-largest net loss after William Blair downgraded its rating on the stock to “Market Perform” from “Outperform.”
Eight GovCon Index stocks shed at least $1.00 each with Boeing (NYSE: BA) down by more than $2.00.
GCI-S&P 500 company Lockheed Martin (NYSE: LMT) led all GCI gainers after a two-day decline of 3.02 percent on investor reaction to President-elect Donald Trump’s Twitter post to criticize the F-35 program’s costs.
Fellow defense contractors Raytheon (NYSE: RTN) and Cubic Corp. (NYSE: CUB) also advanced.
The Fed confirmed market expectations of a 25-basis point hike to the 0.5-0.75 percent range and increased its forecast of 0.25-point increases in 2017 from two to three, which the Fed expects to be followed by three boosts in both 2018 and 2019 before a long-run 3 percent.
According to Reuters, many traders were surprised by the Fed’s latest rate hike projection and believe markets are pricing in a favorable scenario with expectations of tax cuts and domestic spending increases by Trump.
Policymakers based their rate increase forecasts on an outlook of quicker economic growth, lower unemployment and inflation slightly below the Fed’s 2-percent goal.
Information technology was the lone S&P 500 sector out of 11 to advance with real estate the largest decliner.
Market Summary
| Index | Value | Net Change | % Change |
|---|---|---|---|
| GovCon Index | 88.185 | -0.772 | -0.868% |
| S&P 500 | 2, 253.28 | -18.44 | -0.81% |
| Dow Jones Industrial Average | 19, 792.53 | -118.68 | -0.60% |
| NASDAQ | 5, 436.67 | -27.16 | -0.50% |
| Advancing GovCon Index Issues | 4 |
| Declining GovCon Index Issues | 26 |
| Unchanged GovCon Index Issues | 0 |
Lowest GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –¾ | % Change |
|---|---|---|---|---|
| MCK | McKesson Corp. * | 143.37 | -4.60 | -3.11% |
| ICFI | ICF | 53.50 | -3.80 | -6.63% |
| BA | Boeing * | 154.47 | -2.19 | -1.40% |
| EGL | Engility Holdings | 33.86 | -1.62 | -4.57% |
| HON | Honeywell International * | 116.51 | -1.58 | -1.34% |
Lowest GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –¾ |
|---|---|---|---|---|
| ICFI | ICF | 53.50 | -3.80 | -6.63% |
| EGL | Engility Holdings | 33.86 | -1.62 | -4.57% |
| NAV | Navistar International | 29.73 | -1.21 | -3.91% |
| MCK | McKesson Corp. * | 143.37 | -4.60 | -3.11% |
| BAESY | BAE Systems | 29.66 | -0.74 | -2.43% |
Top GovCon Index Net Performers
| Symbol | Company | $ Current Price | Net Change –´ | % Change |
|---|---|---|---|---|
| LMT | Lockheed Martin * | 252.30 | +0.61 | +0.24% |
| NOC | Northrop Grumman * | 232.10 | +0.54 | +0.23% |
| RTN | Raytheon * | 142.84 | +0.43 | +0.30% |
| CUB | Cubic Corp. | 49.75 | +0.05 | +0.10% |
Top GovCon Index Percentage Performers
| Symbol | Company | $ Current Price | Net Change | % Change –´ |
|---|---|---|---|---|
| RTN | Raytheon * | 142.84 | +0.43 | +0.30% |
| LMT | Lockheed Martin * | 252.30 | +0.61 | +0.24% |
| NOC | Northrop Grumman * | 232.10 | +0.54 | +0.23% |
| CUB | Cubic Corp. | 49.75 | +0.05 | +0.10% |
