Here’s How Defense Contractors And Defense ETFs Are Acting After The Pentagon Says 12 US Soldiers Have Been Killed In Attack At Kabul Airport
U.S. stock markets ended slightly lower on Thursday after the Pentagon confirmed that 12 U.S. servicemen and dozens more were killed in two apparent suicide explosions and come under fire from gunmen near Hamid Karzai International Airport in Kabul, Afghanistan, amid by US-led evacuations of the Taliban-controlled country.
The Pentagon confirmed at a press conference on Thursday that at least 11 Marines and a Navy medic were killed in the attacks. Officials said the attack was believed to have been carried out by a regional affiliate of the Islamic State group believed to be far more radical than the militant Islamist Taliban.
According to reports, the number of American casualties and deaths in Kabul could rise.
However, US stocks were largely unaffected after the Taliban quickly took control of the Central Asian country in mid-August, although the Dow Jones Industrial Average DJIA,
the S&P 500 index SPX,
and the Nasdaq Composite Index COMP,
Slightly lower on Thursday amid reports of an increased toll in Afghanistan.
Read: Investors ignore Afghanistan, but risk levels are rising
The US exit from Afghanistan, described by critics as chaotic, has exposed underlying geopolitical risks, some analysts say, and comes after two decades of occupation following the military overthrow of a Taliban regime that had provided refuge to the terrorist group Al Qaeda.
The development may also have clouded the outlook for President Joe Biden’s legislative agenda, although investors have so far been focused on a planned Friday morning speech from Federal Reserve Chairman Jerome Powell, which could provide clues to the central bank. plans for phasing out incentives. Some investors are betting that the Fed could delay those plans if there are signs that the economic recovery is faltering, as the delta variant of the coronavirus SARS-CoV-2 has a heavy impact on some US states.
So far, however, trading in defense contractors and exchange-traded funds tracking the potential for heightened militarization and geopolitical risks in the region has been mixed on Thursday, with Pentagon officials describing the development of Kabul airport as a “complex attack.” called.
“We also know that a number of Afghans have fallen victim to this horrific attack. Our thoughts and prayers go out to the loved ones and teammates of all the dead and injured,” said Pentagon spokesman John Kirby. in a statement.
The Wall Street Journal reported that at least 60 Afghans were killed along with the 12 US servicemen when two blasts ripped through crowds trying to enter the American-controlled facility amid the US-led evacuation of the country.
Shares of Defense Contractors North Grumman Corp. NOC,
and Lockheed Martin Corp. LMT,
closed higher on Thursday, up 1.1% and 0.8% respectively, and looking at week-to-date gains, up 1% and 1.3%, data from FactSet shows.
Shares of Boeing Corp. BA,
were 2.1% lower, and those of General Dynamics GD,
had fallen marginally, by 0.1%.
Meanwhile, exchange-traded fund the iShares US Aerospace & Defense ETF ITA,
closed 1%, while the comparable SPDR S&P Aerospace and Defense ETF XAR,
ended lower, down 0.7%.
Earlier this week, Secretary of State Antony Blinken said the U.S. has evacuated at least 4,500 U.S. citizens and likely more since Aug. 14, but noted that there were still about 1,500 Americans in the area. Military officials have noted that not all US citizens in the country have wanted to leave.
Checking out: What the Afghan Government Collapse Could Mean for the US Stock Market?
Bonds were little affected by the latest developments in Afghanistan, benchmarked by 10-year Treasury bills TMUBMUSD10Y,
with a yield of 1.35%. Yields for debt move in the opposite direction of prices.
The dollar, as measured by the ICE US Dollar Index DXY,
however, rose 0.3% during the session, but is down 0.5% so far from the week so far.