Update II: (5:30 p.m. Wednesday): Wall St. is clearly expecting a slew of Tomahawks to be fired at some point — and then replaced. Raytheon’s stock, at the close of trading, was at $77.43, approaching its 12-month high.
Update (11:36 a.m. Wednesday): “The Street” continues bullish about war. Raytheon stock is trading at $77.02 per share.
President Barack Obama has asked Congress to delay action on any measure that would authorize him to use military force to punish his Syrian counterpart, Bashar al-Assad, for using chemical weapons. Lawmakers are obliging, saying they’ll “hit the pause button” while the White House examines a Russian proposal to seize Assad’s chemical arms.
So, if this diplomatic gambit fails, will Obama still unleash a Tomahawk cruise missile barrage on Syria? Wall Street on Tuesday — even as the White House veered, for now, away from military strikes — seemed more convinced than ever that the Tomahawks soon will be en route to Damascus. After the president’s speech, will that change?
Even as the White House on Tuesday morning leaked word that Obama would allow Moscow to work its plan through the United Nations before attacking Syria, “the Street” seemed convinced the chances of American strikes remain high.
The stock price for Raytheon, which makes the Tomahawk missile, neared $77 per share, nearly $25 higher than its 12-month. When trading ended Tuesday, Raytheon’s stock was trading at $76.89 per share. Notably, the stock price soared past $77 per share in the hours immediately following Obama’s embrace of a diplomatic attempt at seizing Assad’s chemical weapons.
Obama’s recent march to the brink of war in Syria sent Raytheon’s stock surging to a 52-week high of $77.93 in the last week of August.
The Syria-fueled prices are well above the stock’s six-month (just under $55 a share) and 12-month ($52.24) lows. The price fluctuated between $55 and $60 from March to late April, climbing to nearly $65 by late May. It hovered around $65.50 during June and for much of July, then began a slow climb toward current levels.
Much of the cable news punditry and major print/online media headlines on Tuesday evening and Wednesday morning predict U.S. strikes are now unlikely. But, as senior lawmakers in both chambers have said since the Russian plan surfaced have said, Obama must now channel his inner Ronald Reagan, meaning he must “trust but verify” Russia’s plan.
Did Obama’s speech change Wall Street’s mind? Will Raytheon’s stock plummet on Wednesday? We’ll keep an eye on the market’s reaction to Obama’s big speech and keep you posted throughout the day.