Why gun stocks soared after Obama's win
In a repeat of 2008, traders anticipated an increase in firearm sales after the election.
In a reaction that surprised absolutely no one, investors rushed into gun stocks after President Barack Obama's win, expecting firearm sales to soar soon.
Gun makers Smith & Wesson Holding (SWHC) and Sturm Ruger (RGR) rose sharply Wednesday in a repeat of sorts of the response to Obama's first presidential victory in 2008. The stocks were up again in Thursday's trading. Gun stocks have performed well over the four years of Obama's term. Sturm Ruger, for example, rose from $7.04 on Election Day in 2008 to $50 Thursday.
But investors think the stocks have farther to go, propelled by fears that Obama will crack down on guns in his second term.
Sturm Ruger shares rose 6.8% Wednesday and another 4.8% Thursday. Smith & Wesson shares rose 9.6% Wednesday and another 3.8% Thursday. By comparison, the Standard & Poor's 500 Index ($INX) fell nearly 2.4% Wednesday and was down slightly Thursday.
The National Rifle Association certainly contributed to fears of expanded gun control in Obama's second term. "An anti-gun Supreme Court, a U.N. Arms Trade Treaty, and a sweeping gun ban aren't just a possibility in a second Obama term," the association's CEO, Wayne LaPierre, wrote on the group's website. "They're a near certainty."
But Obama hasn't taken much action on gun control. In fact, he signed legislation allowing loaded guns into national parks and on Amtrak trains. Still, in the second presidential debate, Obama mentioned the possibility of keeping automatic weapons out of the hands of criminals and the mentally ill.
"Part of it is seeing if we can get an assault weapons ban reintroduced, but part of it is also looking at other sources of the violence, because frankly, in my hometown of Chicago, there’s an awful lot of violence, and they’re not using AK-47s, they’re using cheap handguns," he said.
That comment may have triggered a consumer fear that gun sales will see tighter regulations. In October, the number of federal background checks on potential gun buyers rose 10.6% from the month before to 1.61 million, according to the FBI.
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| Tags: | Kim PetersonRGRSWHC |
GHW Bush is the reason you can't buy a machine gun barrel. Yes in one term this became a class III firearm. Party affiliation has little to nothing to do with the assault on the 2nd amendment. Clinton's assault weapons ban came from a republican dominated congress.
The #2 cause of premature death is car accidents which used to be #1, that spot is now held by suicide. I have never heard anyone say take away the cars. Guns are the symptom not the problem. The problem is a devastating blow to the country's moral. Every time and everywhere poverty raises crime follows. If you steal everything a man owns except his guns and ammo what do you suppose will happen next? How about we focus our energy on the criminals in the banking sector and Wall Street?
Facts don't lie. Obama did not attempt to pass one piece of legislation to restrict gun laws during his first term. On the contrary he actually expanded gun laws. The NRA and other right wing nut jobs hatred of Obama are based solely on irrational fears (see race) not reality. During his entire presidency all of their arguments against Obama centered around what Obama plans to do, or what he secretly wants to do, not what he has done. Obama has governed as a moderate republican, yet he is painted as a socialist. Do you people even know what socialism means? Obama had every opportunity to pass legislation to restrict gun rights, with all of the mass shootings that occurred, hell a sitting congress woman was shoot by a gunman carrying extended clip magazines and Obama took no action to pass restrictive gun laws, even though it would have been justified.
You right wingers are the biggest idiots. Fox news and right wing organizations like the NRA have created an alternate reality for you to live in and they are laughing all the way to the bank. Your unfounded fears about Obama they cultivate have made LaPierre and right wing pundents rich beyond their wildest dreams, it is comical. I was watching Bill O'reilly yesterday and he plugged his books, merchandise and subscriptions to his website every 30 seconds, it’s hilarious you are all a bunch of mindless sheep. This election burst the bubble that you live in. Your hate and fear mongering are not shared by the rest of the country.
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