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 12:28PM
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Keeping automatic weapons out of the hands of criminals and the insane. I guess that will outrage the Tea Baggers.
Nov 8, 2012 12:27PM
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I have a question, why are people pointing the finger at Mr. President Obama? What are you doing about Congress, Mayors, Govenors, etc... Point blank the one's with all the negative comments was born, raised, educated, and live off RACISM. Yes I said it! You don't even know this man, and your stating opinions of pure foolishness. What ever happen to "ONLY GOD CAN JUDGE ME."  I can care less if Mr. President is Black or White, Democrate or Republican, but what's most important is that we come up with a 'Possible" solution that will continue to grow and benefit for the American people. We continue going through this Race and Political party race that we continue to set OURSELVES back. Why can't we come up with a plan, that not only should work for 4-8 years but something to work for the next 100 years. Please check yourselves and stop all the buffooney comments, and stand like UPRIGHT Men, Woman, and Children as you should. Look at the Bigger picture, REMEMBER we will never satisfy everyone 100%, it's no different than how you can't get along with you co-workers, the PROBLEM is YOU not OUR Mr. President.
Nov 8, 2012 12:26PM
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well what'd you expect??? this bastard osama wants to take away rights of gun owernership, is that something new or surprising??? of course the **** not!!!

 

oh and btw barry you scumbag marxist pig, you can try to take away guns from decent law-abiding citizens and it isn't going to happen, the GUn Lobby is more powerful than you azzwipe and your lackies anytime of day or night and will survive your insane 2nd term, so will the rest of us you pig!

Nov 8, 2012 12:26PM
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Yeah, that is all we need, more White guys running around with guns.  Because their afraid of being invaded by the god forbide,  the big bad 'Minorities'.   That Black guy in the big White House, is so scary, he might come and get my thirty guns, that I am keeping hidden in my underground encampment that I created in the Forest perserve, across the street from my house, in the woods.  If you remotely resemble this comment.  You are the problem, definitely not any solution. 
Nov 8, 2012 12:26PM
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It is funny that this is even an issue.  People assume with a democrat in office that this is necessary, however this issue was not even in the forefront over the last four years and will likely not be touched in the following four..It is not a meaningul issue for most Americans at this point, nor the president.
Nov 8, 2012 12:26PM
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I bet most of those gun sales are in southern states or those that are die-hard Republican state.  After 2008, people rushed to buy guns and ammunition that sparked ammunition shortages for even those recreational target shooters.
Nov 8, 2012 12:24PM
Nov 8, 2012 12:23PM
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A well regulated Militia, being necessary to the security of a free State.

Those of you defending the second amendment may want to learn to read. It speaks of a "WELL REGULATED" militia. There is nothing in it that states that the state (aka the govenmint) should not regulate arming of the citizens. The "founding fathers" were more cunning than you think. 
Nov 8, 2012 12:23PM
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I tend to not trust Obama on much of anything he says. He has an agenda and a philosophy he has been exposed to since birth-socialism/communism guides him.   Case in point his wide stance on gays and marriage-apologies to Larry Craig, no I take that back, no apologies!  He will endeavor to limit,restrict and track fire arms. Stock up now.
Nov 8, 2012 12:23PM
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And the scum crawls out from under their slimy rocks to make their snide remarks.  Hopefully, they will be the ones to hold the weapons in the reverse when they fire them!  YOU LOST; WE ALL TRIED TO TELL YOU, AND YOU CALLED US LIARS.  ACCEPT THE FACT AND GROW UP.  YOU CAN START THIS ALL OVER IN 4 YEARS!
Nov 8, 2012 12:23PM
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Fast n Foolish was an attempt by the Obama adminstration to demonize guns but it blew up in their faces. The rise of gun stocks are gun owners way of saying, Obama, we don't trust you and never will.
Nov 8, 2012 12:22PM
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ColonelK said;
"Today "Vote for Revenge" Obama revived the proposed UN Ban on private gun ownership. "

Actually, the UN proposed ban is on all Automatic, and Semi-Automatic firearms.
This would include Pistols, Rifles, and Shotguns that automatically load the next round into the magazine. 
This would affect a huge number of hunting firearms, not just assault weapons.

Obama is not the one proposing the ban, but he seems to don his knee pads whenever the UN calls.
Nov 8, 2012 12:22PM
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We are gun owners, and we are Democrats. Obama hasn't done anything to warrant the ridiculous surge in gun/ammunition sales. However, I am content to know that between my husband and myself and our Democrat offspring we are better armed than any group of Republicans we know of.  Love to overhear people talking about their gun fears. We just laugh...
Nov 8, 2012 12:20PM
Nov 8, 2012 12:19PM
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We know when the danger is close and it is ever so close right now. Buy guns and ammo quickly!
Nov 8, 2012 12:17PM
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Today "Vote for Revenge" Obama revived the proposed UN Ban on private gun ownership.  Harry Reid only needs to rubber stamp this in the Senate and he has effectivey disarmed the law abiding and bypassed the Constitution. Obama's claims that this won't affect American gun rights is about as truthful as any other statement he has made for example: Obamacare would make healthcare more affordable, the auto bailout paid for itself (current loss 25 billion), stimulus would bring down unemployment to 5%, I want to reach out to the bitter clingers, etc.

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so now all the morons are armed - and more dangerous.  great.

Nov 8, 2012 12:14PM
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If a ban on weapon is enacted, It will only serve to take the weapons out of law abiding citizen hands. Then the criminals will have just what they want, A defenseless population to pry on.
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