New York, Jan 8 (AP) US stock indexes are drifting at the start of Thursday’s trading, masking some big gains underneath the surface for makers of weapons and other military equipment after President Donald
Trump said he wants to increase spending on them sharply The S&P 500 slipped 0.2 per cent in early trading, coming off its first loss in four days, though it remains near its all-time high set earlier this week. The Dow Jones Industrial Average was down 109 points, or 0.2 per cent, as of 9:35 am Eastern time, and the Nasdaq composite was 0.4 per cent lower.
Yields ticked higher in the bond market following mixed data on the US economy. The number of US workers applying for unemployment benefits rose last week, an indication of increasing layoffs, but by no more than economists expected.
Other reports, meanwhile, said US workers improved their productivity by more in the summer than economists expected, while the US trade deficit unexpectedly shrank in October.
On Wall Street, defence-industry companies jumped to some of the biggest gains after Trump said he wants to increase US military spending to USD 1.5 trillion in 2027 from USD 901 billion in order to build the “Dream Military.” Northrop Grumman soared 8.2 per cent, Lockheed Martin climbed 8.8 per cent and L3Harris Technologies jumped 8 per cent. They more than made up their losses from the prior day, when Trump complained defence contractors were making military equipment too slowly.
RTX came under particular criticism by Trump, and its stock rose less than peers. It added 3.4 per cent after Trump said that it was the “slowest in increasing their volume.” Trump signed an executive order Wednesday calling on the Pentagon to ensure future contracts with contractors containing a provision prohibiting their ability to buy back their own stock during a period of underperformance on US government contracts.
Elsewhere, oil prices jumped to continue their zigzags since Trump ousted the leader of Venezuela last weekend.
A barrel of benchmark US crude climbed 2.1 per cent to USD 57.18. Brent crude, the international standard, rose 2 per cent to USD 61.14 per barrel.
Venezuela is potentially sitting on the largest oil deposits in the world, and any increase in production could push further downward on prices, which have already been falling on expectations for plentiful supplies.
But it would also likely require billions of dollars of investment to get Venezuela’s aging infrastructure in good-enough shape to ramp up production sharply.
It’s not just Venezuela where the US military could see action. Trump in recent days has also called for taking over the Danish territory of Greenland for national security reasons and has suggested he’s open to carrying out military operations in Colombia.
In stock markets abroad, indexes fell across much of Europe and Asia.
Japan’s Nikkei 225 dropped 1.6 per cent for one of the world’s bigger moves, while Hong Kong’s Hang Seng fell 1.2 per cent.
In the bond market, the yield on the 10-year Treasury rose to 4.18 per cent from 4.15 per cent late Wednesday. (AP) NPK NPK
