Defense Stocks Skyrocket

Since 2001, defense stocks that make up the S&P Aerospace & Defense Select Industry Index have climbed 181.7 percent; the broader market is up 17.6 percent according to an article published last Sunday in the Washington Post.

No longer second to futuristic Defense programs, the basic everyday needs of the men and women on the ground have benefited from enourmous Pentagon spending.

''Clearly anything that is still related to the war in Iraq and Afghanistan is the hottest market right now,'' Byron Callan, an independent industry analyst told the Post.

The newest program MRAPs, the Marine Corps' mine-resistant vehicle, has expanded recently from $8 billion to $20 billion, improving dramatically the outlook for the manufacturer.

According to a report by the Center for Strategic and Budgetary Assessments, spending will reach $624.6 billion in fiscal 2008, including more than $100 billion in war supplemental outlays.

But cooling down could occur with a shift in the political landscape. "I am positive on defense stocks still, but there is cautionary note in background. There could be potential cuts to the budget, particularly if we get a Democratic president and Democratic Congress," Richard Tortoriello, equity analyst for aerospace and defense at Standard and Poor's told the Post.

''The defense industry has done very, very well without much oversight from Congress,'' David Strauss, U.S. aerospace and defense analyst for UBS Investment Research told the Post.

Among the stocks sprinting to the bank this year-

Force Protection up 31%

Oshkosh gained 34%

Lockheed Martin stock has gained 6.7%

General Dynamics gained 9%

Raytheon up 4%



