Gun stocks rise as Obama presses for reform
Investors are betting that strong gun sales will continue in anticipation of a crackdown on assault weapons.
Wall Street is betting that demand for guns will continue to rise ahead of a crackdown on sales of military-style weapons that many expect Obama to push for in the aftermath of Friday's mass murder at a Connecticut elementary school.
Smith & Wesson traded at $8.47 Wednesday afternoon, a gain of nearly 9%. Sturm Ruger jumped about 6% to $43.06. Shares of both stocks have been in a downturn from early December. Still, Smith & Wesson's shares have almost doubled this year while Sturm Ruger has surged more than 28%.
In a press conference in Washington, D.C. Wednesday, Obama announced that Vice President Joe Biden would lead the task force focusing on ways to reduce gun violence. He vowed that the group would not be "some Washington commission" whose recommendations would soon be forgotten. Biden's group is tasked with developing a set of "concrete proposals" due no later than January, according to Obama.
"This time the words need to lead to action," he said. "The fact that this problem is complicated can no longer be an excuse for doing nothing."
The slaughter of 20 young children and six educators at Sandy Hook Elementary School in Newtown, Conn., has shaken the gun industry and society as a whole to its core. Gun control has suddenly rocketed to the forefront of discussions in Washington and in big business. Cerberus Capital, a private equity firm, announced plans Tuesday to sell gun manufacturer Freedom Group, whose products include the .223 caliber Bushmaster AR-15 rifle used in the killings. Some retailers, such as Dick's Sporting Goods (DKS), are pulling some semi-automatic weapons from their shelves.
It's unclear whether Cerberus will be able to find a buyer, or for how long retailers will suspend sales of what the industry calls "modern sporting rifles." The National Rifle Association and the lesser-known National Shooting Sports Federation, which is also based in Newton, Conn., are powerful voices in this national debate. The NRA is planning what it describes as a "major" announcement Friday and is promising "meaningful contributions to help make sure this never happens again."
Obama reiterated his support Wednesday for the rights of law-abiding citizens to own firearms under the Second Amendment, noting a tradition of gun ownership in the U.S. that goes back generations. But many people are starting to question whether this right extends to military-style weapons and high-capacity ammunition clips. Both sides agree on the need to keep weapons out of the hands of dangerous mentally ill people.
Whether these sorts of actions could have averted the tragedy in Newtown, Conn., is tough to say. Police say shooter Adam Lanza used his mother's weapons to carry out his heinous act after murdering her in the home they shared. Gun owners often argue that all the gun control laws in the world won't stop a determined madman from hurting innocent people. But, as Obama noted, that view is a cop-out.
"We won't prevent them all, but that cannot be an excuse not to try," he said.
More from Money Now
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Just reported, January wholesale inventories rose 0.6% while the Briefing.com consensus expected an increase of 0.4%. Today's report follows last month's revised increase of 0.4% (from 0.3%). Nasdaq +2.96 at 4337.41... NYSE Adv/Dec 1176/1530... Nasdaq Adv/Dec 947/1337.
More Market News
Shares of DVR pioneer TiVo are up 40% over the past 2 years, but unlike with the industry giants, there's still plenty of room to run with this pay-TV play.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'