Why gun stocks soared after Obama's win

In a repeat of 2008, traders anticipated an increase in firearm sales after the election.

By Kim Peterson Nov 8, 2012 2:41AM
Updated 12:25 p.m. ET

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.Ruger pistols © Getty Images

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: RGRSWHC
835Comments
Nov 8, 2012 3:29PM
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They said the same thing when Obama won the first time. Except he was going to take away your bullets. Having two personal friends in the fire arms business that own stores said people overreacted and nothing happened except the manufactures could not keep making bullets so supplies ran short. All this was a rumor then and the same thing now.
Nov 8, 2012 3:28PM
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People fail to realize that the death penalty costs more than life imprisonment...and those same people screaming to kill other human beings are probably sitting safe and sound in their homes, clabbering online for someone to die just so that they feel a little better...

Gun control is ludicrous as is. By cracking down on guns, you are 
Nov 8, 2012 3:28PM
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It isn't surprising at all. We realize the republicans are going to come to a point where they try to use those firearms on anyone that isn't like them or believe their bible thumping ways. That is why we recognize them as the american taliban and exactly why we cannot let the tea party control our government and military. Ever!
Nov 8, 2012 3:28PM
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Help out Remington, Western, Federal and other ammo manufacturers, stock up now on ammo.  IF obumer can't get your gun he will go after the ammo.  Buy it now.
Nov 8, 2012 3:27PM
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Overly impressionable and excitable individuals purchasing deadly firearms en masse? Fabulous!  
Nov 8, 2012 3:27PM
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Reading most of these posts is just mind blowing. Scratch real issues, economy, gas prices, jobs. Im more concerned about these paranoid gun toting idiots arming thier homes for some shootout they expect to happen.

Nov 8, 2012 3:26PM
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IF PEOPLE COULD LEARN HOW TO USE A GUN THAT WOULD BE HELPFUL ...!
THEY JUST END UP HURTING THEM SELF or ANOTHER PERSON....!
I AM FOR GUNS BUT LEARN HOW TO USE ONE FOR GODS SAKE......!
Nov 8, 2012 3:24PM
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Obama has not tried changing the 2nd amendment. I live in a red state and every year the police hold their annual gun return w/ no questions asked, legal or not in exchange for $100 gift cards to the grocery store or Wal-Mart. The turn out has been so huge at times that they were asking if you still would like to turn in the guns for nothing you may do so and many did. Here if someone is on your property you have the right to shoot & ask questions later. I grew up using first bb guns then on to hunting rifles then hand guns. I am comfortable having and shooting guns and teaching my boys as well. I do not have some crazy stockpile nor do I intend to have one. Being born and raised in TX you carry your shotgun on your gun rack behind your head in your truck. We need control over the David Koresh's and the gunman in Killeen not a family protecting themselves from someone invading their home. People who are in jail for gun use are not there because they were legally using weapons. I believe in the death penalty for murders and child molesters, the repeat offenders can be put on an island far from the states and let them survive on their own. If they want to act like animals treat them like animals. I am tired of people blaming their environments on the reason why they are criminals or drug addicts.I was molested from the age of 5 until 14 when I finally spoke up. I am not a stripper, drug addict, alcoholic and have never been to jail. I do suffer from PTSD and anxiety attacks. I very well could have taken the easy way out.
Nov 8, 2012 3:24PM
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The only industry Oboma has helped in the last 4 years is the gun industry, and he didn't give them one  Govt cent?
Nov 8, 2012 3:24PM
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They are contributing to the wrong party should be giving to dems considering how much they make when they get elected.
Nov 8, 2012 3:23PM
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this just in  THE SKY IS NOT FALLING,   THE SKY IS NOT FALLING!! HAHAHAHAHAHHAH
Nov 8, 2012 3:22PM
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Except that automatic weapons are already illegal for the public to own.
Nov 8, 2012 3:21PM
Nov 8, 2012 3:21PM
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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?

Nov 8, 2012 3:21PM
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Why can't we all just play with water guns and laugh? Life....... sigh.....
Nov 8, 2012 3:21PM
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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.

 

Nov 8, 2012 3:20PM
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My neighbors have no idea how many weapons I keep in my basement. They might be shocked if the knew. Guess who does know how many weapons I have? The Federal Government knows. They don't seem to be worried so I say to all you gun grabbers....Lighten up Francis.
Nov 8, 2012 3:19PM
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All this hype is a bunch of wasted enenergy.  The people profiting from your fear of having guns banned are the gun makers and the insiders (NRA management).  Do the think, that they do not know, that their scar tatics will result in icreased sales and value of stock.  You are being played like a Fox News auidience.
Nov 8, 2012 3:19PM
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People who are criminals will always find a way to be violent!  Enforce the gun laws we have and always remember no matter what is used to commit a crime it is a just an  object. People kill and hurt people not objects like guns, they do not aim and shoot themselves.
Nov 8, 2012 3:19PM
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NIT WIT WITH GUNS !!!
MOST PEOPLE DO NOT EVEN KNOW HOW TO USE A GUN !
GOOD LORD !
HELP.......!!!!!!!!!!!
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