Shares of several companies with ties to U.S. defense spending, including Lockheed Martin, climbed to new all-time highs on Wednesday, as tensions between North Korea, the U.S., and the United Nations continue to escalate.
The growing conflict between the U.S. and North Korea sent many markets around the world down on Tuesday and Wednesday. One of the biggest reasons for the decline is a new heightened war of words between President Donald Trump and Pyongyang representatives, which stem from UN Security Council economic sanctions that were imposed unanimously on North Korea over the weekend—the sanctions will reportedly cut off $1 billion from the nation’s annual foreign revenue.
Since then, an aggressive back and forth has occurred between the U.S. president and the North Korean capital. On Tuesday, President Trump warned North Korea against continuing its threats, or testing missiles, saying the U.S. would respond with “fire and fury like the world has never seen.”
Pyongyang then responded that it would consider using missiles against Guam, a U.S. territory in the Pacific that houses U.S. military bases.
Wasting little time, President Trump took to Twitter (TWTR - Free Report) on Wednesday morning to boast about the renewed strength of America’s nuclear arsenal.
On the back of these escalating tensions and provocations, U.S. defense-based stocks saw gains on Wednesday morning.
Lockheed Martin (LMT - Free Report) jumped 1.18% in morning trading to reach a new all-time intraday trading high of $303.92 a share. Raytheon Company (RTN - Free Report) also saw its stock price hit an all-time high in morning trading on Wednesday after it climbed 2.29% to $178.80 per share.
Shares of Northrop Grumman (NOC - Free Report) rose 1.32% to $273.42 a share, which marked a new all-time high water mark for the company. General Dynamics (GD - Free Report) rose 1.05%, while Boeing (BA - Free Report) fell 0.60% on Wednesday.
Defense ETFsiShares US Aerospace & Defense ETF (ITA - Free Report) and PowerShares Aerospace & Defense ETF (PPA - Free Report) saw marginal gains, while SPDR S&P Aerospace & Defense ETF (XAR - Free Report) dipped slightly.
Other Movement Tied To North Korea
Due to South Korea and its capital Seoul’s close proximity to North Korea, technology powerhouse Samsung fell 3.02%. The iShares MSCI South Korea Index Fund ETF (EWY - Free Report) , which tracks South Korean companies, fell 1.95%.
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