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Honeywell International Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/HON#NASDAQ">HON</a>) shares are trading lower after the company reported third-quarter results <a href="https://www.benzinga.com/pressreleases/24/10/n41511042/honeywell-reports-third-quarter-results-updates-2024-guidance" target="_blank" rel="noreferrer noopener">and updated FY24 guidance</a>.
Revenue&nbsp;grew&nbsp;6%&nbsp;year-over-year (organic:&nbsp;+3%) to&nbsp;$9.728 billion, missing the consensus of&nbsp;$9.901 billion.
The sales increase was attributed to strong growth in defense and space, commercial aviation, and building solutions.
Adjusted EPS was&nbsp;$2.58 (+8% Y/Y),&nbsp;<a target="_blank" href="https://www.benzinga.com/earnings" rel="noreferrer noopener">beating the consensus of&nbsp;$2.50</a>.
Sales by Segments: Aerospace Technologies&nbsp;$3.912 billion&nbsp;(+12% Y/Y), Industrial Automation&nbsp;$2.50 billion (-5% Y/Y), Building Automation&nbsp;$1.75 billion (+14% Y/Y) and Energy and&nbsp;Sustainability Solutions&nbsp;$1.56 billion (+1% Y/Y).
Operating margin contracted by 180&nbsp;bps Y/Y to&nbsp;19.1%, and Segment margin remained flat Y/Y at 23.6%&nbsp;in the quarter.
Operating cash flow stood at&nbsp;$2.00 billion and, free cash flow&nbsp;was&nbsp;$1.72 billion. Honeywell held cash and equivalents of about&nbsp;$10.6 billion as of September 30, 2024.
The company deployed&nbsp;$3.1 billion&nbsp;to M&amp;A, dividends, and capital expenditure.
FY24&nbsp;Outlook: The company lowered sales guidance to&nbsp;$38.6 billion &#8211; $38.8 billion&nbsp;(from $39.1 billion &#8211; $39.7 billion prior) <a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">versus the consensus of&nbsp;$39.20 billion</a>.
Honeywell tightened adjusted EPS&nbsp;guidance&nbsp;to&nbsp;$10.15 &#8211; $10.25 (from&nbsp;$10.05 &#8211; $10.25) <a target="_blank" href="https://www.benzinga.com//node/39958034" rel="noreferrer noopener">versus the estimate of&nbsp;$10.13</a>.
Also, Honeywell revised the&nbsp;outlook for segment margin to&nbsp;23.4% &#8211; 23.5% (from&nbsp;23.3% &#8211; 23.5% prior), with segment margin contraction of 10 bps to flat.
The company now expects an operating cash flow of&nbsp;$6.2 billion &#8211;&nbsp;$6.5 billion&nbsp;and a&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">free&nbsp;cash flow of&nbsp;$5.1 billion&nbsp;–&nbsp;$5.4 billion</a>.
Honeywell chairman&nbsp;and CEO&nbsp;Vimal Kapur&nbsp;said,&nbsp;&#8220;Our Accelerator operating system and culture of execution enabled us to grow segment profit&nbsp;by 6% in spite of transitory sales headwinds. We continue to see healthy order rates and sequential growth in our backlog, even excluding the impact of acquisitions closed in the quarter, giving us confidence in our ability to achieve our long-term targets.&#8221;
&#8220;We have made significant progress this year on the simplification and optimization of the Honeywell portfolio with the announcement of our plans to spin off Advanced Materials and exit our PPE business, as well as <a target="_blank" href="https://www.benzinga.com/news/large-cap/24/10/41224658/honeywell-seeks-to-simplify-structure-boost-flexibility-with-10b-spin-off-of-advanced-materials-un" rel="noreferrer noopener">the closing of four strategic acquisitions</a>.&#8221;
Investors can gain exposure to the stock via&nbsp;Themes Transatlantic Defense ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NATO#NASDAQ">NATO</a>) and&nbsp;Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>).
Price Action: HON shares are down 1.98% at $215.99 premarket at the last check Thursday.
Photo via Shutterstock
Read Next:
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/10/41254817/honeywell-expands-qualcomm-partnership-ai-and-connectivity-to-supercharge-energy-industry-operat" target="_blank" rel="noreferrer noopener">Honeywell Expands Qualcomm Partnership: AI And Connectivity To Supercharge Energy Industry Operations</a></li>
</ul>

Earnings

Large Cap

Guidance

Movers

NATO

Honeywell Q3 Earnings: Revenue And Profit Growth, Adjusts Annual Outlook Factoring Acquisitions

The Boeing Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) shares are trading higher premarket on Monday. The company disclosed an order from Emirates SkyCargo for five additional 777 Freighters, <a target="_blank" href="https://www.benzinga.com/pressreleases/24/10/n41421640/emirates-skycargo-to-expand-fleet-capacity-with-five-more-boeing-777-freighters" rel="noreferrer noopener">adding to a previous order of five</a>.
Finalized in September, the order increases Emirates&#8217; total Boeing widebody aircraft orders to 249, including 14 of its 777 Freighters.
Emirates SkyCargo plans to nearly double its fleet of 777 Freighters to 21 in the coming years, up from the current 11, as it continues expanding its capacity.
The 777 Freighter, with a range of 9,200 kilometers and a 102-tonne capacity, is the longest-range and highest-capacity twin-engine cargo jet.
It allows operators to connect key markets like the Middle East, U.S., and Europe with more nonstop routes and improved operating efficiency.
HH Sheikh&nbsp;Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said, &#8220;Demand for Emirates&#8217; air cargo services has been booming. This reflects&nbsp;Dubai&#8217;s growing prominence as a preferred and trusted global logistics hub, and also the success of Emirates SkyCargo&#8217;s bespoke solutions that address the needs of shippers in different industry sectors.&#8221;
Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/10/41336079/boeing-shares-jump-as-troubled-aerospace-company-inks-10b-supplemental-credit-agreement-with-big" rel="noreferrer noopener">Boeing Shares Jump As Troubled Aerospace Company Inks $10B Supplemental Credit Agreement With Big Banks</a>
Stephanie Pope, president and CEO of Boeing Commercial Airplanes, said, &#8220;Emirates continues to set the direction for our industry and we deeply appreciate the trust they have placed in the Boeing widebody family to serve as the backbone of their global fleet.&#8221;
Recently, the Boeing union announced a tentative agreement that includes a 35% wage increase over four <a target="_blank" href="https://www.benzinga.com/markets/equities/24/10/41416584/tentative-deal-announced-to-end-boeing-strike-union-will-vote-wednesday" rel="noreferrer noopener">years and improved retirement benefits</a>.
If approved, the deal will replace a previous contract from 2008 and aims to resolve ongoing financial challenges for Boeing.
Investors can gain exposure to the stock via&nbsp;Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) and&nbsp;Gabelli Commercial Aerospace and Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GCAD#NYSE">GCAD</a>).
Price Action: BA shares are up 3.87% at $161.00 premarket the last check Monday.
Photo via Shutterstock
Read Next:
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/10/41405936/spirit-aerosystems-plans-employee-furloughs-amid-ongoing-boeing-strike-faces-layoff-risk" target="_blank" rel="noreferrer noopener">Spirit AeroSystems Plans Employee Furloughs Amid Ongoing Boeing Strike, Faces Layoff Risk</a></li>
</ul>

Contracts

GCAD

Boeing Lands Big Win: Emirates Orders 5 More 777 Freighters

The Israeli military confirmed on Thursday <a href="https://www.benzinga.com/markets/asia/24/10/41385179/hamas-chief-oct-7-mastermind-yahya-sinwar-possibly-dead-idf-conducts-dna-tests-after-gaza-clash">the death of Yahya Sinwar</a>, the top leader of Hamas, with one word: &#8220;Eliminated.&#8221; 
What Happened: Israel Defense Forces killed Sinwar — Israel's most wanted target since the war with Hamas began on Oct. 7 — in a firefight in Gaza.
Sinwar orchestrated an assault that killed about 1,200 people and led to the abduction of over 200 others.
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<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Eliminated: Yahya Sinwar.
&mdash; Israel Defense Forces (@IDF) <a href="https://twitter.com/IDF/status/1846957737487278263?ref_src=twsrc%5Etfw">October 17, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
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In a prepared <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/10/17/statement-from-president-joe-biden-on-the-death-of-yahya-sinwar/">statement</a>, President Joe Biden said the IDF &#8220;relentlessly pursued Hamas's leaders&#8221; with the help of U.S. intelligence.
&#8220;There has rarely been a military campaign like this, with Hamas leaders living and moving through hundreds of miles of tunnels, organized in multiple stories underground, determined to protect themselves with no care for the civilians suffering above ground,&#8221; Biden said. 
&#8220;Today, however, proves once again that no terrorists anywhere in the world can escape justice, no matter how long it takes.&#8221;
Sinwar's body was retrieved after an exchange of fire on Wednesday, according to the <a href="https://www.nytimes.com/live/2024/10/17/world/israel-lebanon-iran-gaza-news?campaign_id=190&amp;emc=edit_ufn_20241017&amp;instance_id=137113&amp;nl=from-the-times&amp;regi_id=136109156&amp;segment_id=180692&amp;user_id=e415429009fa21c5b8b4141c24d72bca">New York Times</a>, citing Israeli authorities. His identity was verified using dental records and fingerprints that matched those on file, Israel Police said. There was no immediate response from Hamas regarding his death.
See Also: <a href="https://www.benzinga.com/news/24/10/41112728/us-boosts-military-presence-in-middle-east-deploys-fighter-squadrons-amid-rising-tensions-with-iran">US Boosts Military Presence In Middle East As Tensions Spike With Iran</a> 
Why It Matters: Sinwar's killing marks a significant development in the yearlong conflict. 
So far, the war in Gaza devastated the region and its people. Despite being only 141 square miles, Gaza is home to over 2 million people. 
Gaza's health ministry reports over 41,000 deaths. Per the Associated Press, Gaza's health ministry <a href="https://apnews.com/article/israel-hamas-war-gaza-health-ministry-health-death-toll-59470820308b31f1faf73c703400b033">doesn't distinguish between civilians and combatants</a>. About 1.9 million Palestinians have been <a href="https://apnews.com/article/israel-palestinians-hamas-war-anniversary-statistics-e61765035c725b3c8d4840e2bab565cd">displaced</a>.
Sinwar&#8217;s death also presents an &#8220;opportunity&#8221; to proceed with negotiations between Israel and Hamas and end the war, Vice President Kamala Harris said, per <a href="https://www.bloomberg.com/news/articles/2024-10-17/harris-says-sinwar-s-death-offers-opportunity-to-end-gaza-war?srnd=phx-latest&amp;sref=TBDibEcD&amp;embedded-checkout=true">Bloomberg</a>. 
Both sides remain deadlocked over key issues. 
Israeli Prime Minister Benjamin Netanyahu addressed the nation and promised the Israeli military would secure the release of all hostages. See below for coverage via CNN.
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<iframe loading="lazy" title="Reporter on what he found interesting from Netanyahu's remarks" width="500" height="281" src="https://www.youtube.com/embed/8hrXuXFzUjA?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
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Defense exchange-traded funds (ETFs) at last check Thursday afternoon, were trending up with the exception of the SPDR S&amp;P Aerospace &amp; Defense ETF:
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) rose 1.8% to $154.70.</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) is up 0.17% to $119.</li>
<li>SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>) is down 0.29% to $162.77.</li>
</ul>
Oil ETFs: 
<ul>
<li>The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), was up 0.15% at $72.51.</li>
<li>The VanEck Oil Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/OIH#NYSE">OIH</a>) was down 0.25% at $286.69.</li>
</ul>
Now Read:
<ul>
<li><a href="https://www.benzinga.com/markets/asia/24/10/41336413/oil-prices-take-largest-plunge-in-over-a-year-as-israel-vows-to-spare-iranian-facilities-energy-stoc">Oil Prices Take Largest Plunge In Over A Year As Israel Vows To Spare Iranian Facilities</a></li>
</ul>
Image: Shutterstock.

Sector ETFs

Politics

Global

Israeli Military, With Help Of US Intelligence, 'Relentlessly Pursued' Deceased Hamas Leader

Boeing Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) shares are trading lower on Wednesday. On Tuesday, the company reported that it delivered over 33 aircraft to customers in September amid the <a target="_blank" href="https://www.benzinga.com/markets/equities/24/10/41236652/boeing-hit-with-737-safety-alert-issues-deliveries-warning-as-strike-continues" rel="noreferrer noopener">disruption to manufacturing operations</a>.
RBC analyst Ken Herbert says that despite the strike, the 27 MAX deliveries in September are viewed as a slight positive.
The analyst anticipates a significant drop in Boeing&#8217;s October deliveries due to the ongoing IAM strike, which began on September 13th, halting production of the 737, 767, and 777 models.
Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/10/41246324/boeing-says-further-negotiations-do-not-make-sense-after-striking-workers-bring-down-planemakers" rel="noreferrer noopener">Boeing Says &#8216;Further Negotiations Do Not Make Sense&#8217; After Striking Workers Force S&amp;P To Place Planemaker&#8217;s Credit Rating On Negative Watch</a>
Initially, investors expected 400-450 MAX aircraft deliveries for the year, but expectations have now likely fallen to around 325, adds the analyst.&nbsp;&nbsp;
Herbert says that investors&#8217; attention is shifting to the MAX production ramp in 2025, with consistent production in the high 30s per month by year-end seen as a positive.
However, the analyst believes that company orders are not a primary concern for investors right now, even as order activity tends to slow during economic easing.
With Boeing&#8217;s substantial backlog, the focus will likely be on resolving the IAM contract and managing liquidity and cash burn amid the ongoing strike, adds the analyst.
The analyst rated the company as Outperform with <a target="_blank" href="https://www.benzinga.com/quote/BA/analyst-ratings" rel="noreferrer noopener">a price target of $220.00</a>.
Today, Boeing suspended negotiations with the machinists&#8217; union after failed talks, deepening financial<a target="_blank" href="https://www.benzinga.com/trading-ideas/technicals/24/10/41248839/boeing-stock-faces-strike-turbulence-as-potential-credit-downgrade-looms" rel="noreferrer noopener"> strain amid a month-long strike</a>.
Technical indicators show Boeing stock under significant selling pressure, with risks of further downside.
Investors can gain exposure to HON via&nbsp;Gabelli Commercial Aerospace and Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GCAD#NYSE">GCAD</a>) and&nbsp;Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>).
Price Action: BA shares are down 2.7% at $150.48  at the last check Wednesday.
Photo via Shutterstock
Read Next:
<ul>
<li><a href="https://www.benzinga.com//node/41246324" target="_blank" rel="noreferrer noopener">Boeing Says ‘Further Negotiations Do Not Make Sense' After Striking Workers Bring Down Planemaker's Credit Rating</a></li>
</ul>

Analyst Color

Price Target

Reiteration

Analyst Ratings

Trading Ideas

Boeing's October Deliveries Expected To Plummet Amid Strike Challenges: Analyst

Honeywell International Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/HON#NASDAQ">HON</a>) shares are trading higher on Wednesday. The company expanded its collaboration with QUALCOMM Incorporated (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QCOM#NASDAQ">QCOM</a>) to create new AI-enabled <a target="_blank" href="https://www.benzinga.com/pressreleases/24/10/n41247915/honeywell-and-qualcomm-work-to-revolutionize-energy-sector-with-5g-low-power-wireless-and-ai-enabl" rel="noreferrer noopener">solutions for the energy sector</a>.
This partnership aligns with Honeywell&#8217;s focus on three key megatrends, including automation, as it enhances its portfolio to meet evolving industry demands.
Through this partnership, Honeywell plans to integrate Qualcomm&#8217;s connectivity and AI capabilities into its applications, including the Honeywell Field Process Knowledge System (PKS).
Also Read: <a target="_blank" href="https://www.benzinga.com/news/large-cap/24/10/41224658/honeywell-seeks-to-simplify-structure-boost-flexibility-with-10b-spin-off-of-advanced-materials-un" rel="noreferrer noopener">Honeywell Seeks To Simplify Structure, Boost Flexibility With $10B Spin-Off Of Advanced Materials Unit</a>
This will enhance connectivity in remote areas of manufacturing facilities, allowing for improved data capture and analytics.
By combining Qualcomm's low-power AI processors with Honeywell&#8217;s advanced sensing technologies, the companies will develop industrial sensors to monitor process, asset, and environmental parameters.
Pramesh Maheshwari, President of Honeywell Process Solutions, said, &#8220;The combination of Qualcomm Technologies&#8217; industry-leading on-device AI processors with Honeywell&#8217;s AI- enabled technology will enable field workers to work smarter, help make assets more efficient and improve the overall performance of the process industry.&#8221;
&#8220;With the introduction of AI-enabled solutions such as Honeywell&#8217;s Field PKS, Multi-Modal Intelligent Agent and sensor technologies, we are advancing what&#8217;s possible for the process industry with mobile field technicians and autonomous operations.&#8221;
Investors can gain exposure to HON via&nbsp;Gabelli Commercial Aerospace and Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GCAD#NYSE">GCAD</a>) and Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>).
Price Action: HON shares are up 1.99% at $211.11 at the last check Wednesday.
Photo via Shutterstock
Read Next:
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/10/41124018/chevron-honeywell-join-forces-for-ai-breakthrough-details" target="_blank" rel="noreferrer noopener">Chevron, Honeywell Join Forces For AI Breakthrough: Details</a></li>
</ul>

QCOM

Honeywell Expands Qualcomm Partnership: AI And Connectivity To Supercharge Energy Industry Operations

United Nations Security Council members convened for an emergency session Wednesday in New York to address Israel, Lebanon, Iran and whether an all-out war in the <a href="https://www.benzinga.com/topic/middle-east">Middle East is preventable</a>.
What Happened: Israeli Ambassador Danny Danon, in his remarks to the UN Security Council, called Iran&#8217;s missile strike the <a href="https://www.benzinga.com/news/global/24/10/41126038/iran-attacks-israel-with-missiles-middle-east-tensions-escalates-s-p-500-stocks-bitcoin-fall-as-oil">&#8220;largest&#8221; in Israel&#8217;s history</a>. 
&#8220;The council must understand the situation Israel is forced to live in. We are under attack,&#8221; Danon said, citing how holy sites were targeted. 
Israeli defense systems intercepted most of the 200 missiles Tuesday as they prepped for ground operations, the <a href="https://apnews.com/live/israel-lebanon-ground-operation-updates">Associated Press</a> reported.
&#8220;The world watched silently as Iran funded and directed attacks against us for the past year, arming and training their proxies for decades,&#8221; Danon added. &#8220;Now the world must step up. Iran must pay a heavy price for this attack. Anything less is complicity.&#8221;
As of early Wednesday afternoon, the meeting remained in session. See video below.
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<iframe loading="lazy" title="LIVE: UN Security Council meeting on the Middle East" width="500" height="375" src="https://www.youtube.com/embed/1VyjPJclLAI?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
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See Also: <a href="https://www.benzinga.com/news/24/10/41143156/oil-prices-spike-energy-stocks-jump-after-irans-missile-attack-on-israel-what-investors-need-to-know">Oil Prices Spike, Energy Stocks Jump After Iran&#8217;s Missile Attack On Israel — What Investors Need To Know</a>
<h3 class="wp-block-heading">Bracing For Further Escalation</h3>
The UN meeting is taking place while Israeli troops&nbsp;battle Hezbollah militants&nbsp;inside Lebanon, making good on Israeli Prime Minister Benjamin Netanyahu&#8216;s&nbsp;vow to retaliate, per <a href="https://www.bloomberg.com/news/articles/2024-10-02/israel-vows-retaliation-for-massive-iranian-missile-attack">Bloomberg</a>.
The Israeli army Wednesday suffered at least eight fatalities since the ground operation began, CNN <a href="https://www.cnn.com/world/live-news/israel-iran-missile-attack-middle-east-10-02-24-intl-hnk#cm1rx3x98000e3b6qp2nmm7pn">reported</a> citing Israel Defense Forces. 
Iran launched the attack against Israel following the recent killing of <a href="https://www.benzinga.com/news/24/09/41079860/israel-tightens-grip-hezbollah-leader-hassan-nasrallah-killed">Hezbollah leader Hassan Nasrallah</a>. 
Since its formation in the early 1980s, Hezbollah — which the U.S. considers a terrorist organization — has received substantial support from Tehran, which views the group as an ally in advancing its influence in the Middle East.
The White House promised consequences for Iran's attack on Israel. On Tuesday, President Joe Biden reiterated at the start of a meeting with officials: &#8220;Make no mistake, the United States is fully, fully supportive of Israel.&#8221;
Market Reaction: Following the missile attacks from Iran on Israel, plus Tuesday&#8217;s <a href="https://www.benzinga.com/news/econ-s/24/10/41139919/private-sector-job-gains-outpace-forecasts-in-september-as-us-adds-143-000-jobs">job and economic data</a>, major stock indices dropped. As of early Tuesday afternoon:
<ul>
<li>The S&amp;P 500 was down slightly by 0.08%. </li>
<li>The Dow Jones was down by 0.02%. </li>
<li>The Nasdaq was up by 0.09%. </li>
</ul>
At last check, ETFs that track the indexes were up:
<ul>
<li>SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) was down 0.01% at $568.56 Tuesday.</li>
<li>SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) was down slightly at $421.23.</li>
<li>The Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which tracks the Nasdaq 100, is up 0.22% to $482.33.</li>
</ul>
&#8220;Financial markets have reacted as one would expect to the heightened geopolitical tensions in the Middle East, with a bout of risk aversion sweeping through asset classes in the past 24 hours,&#8221; said Matthew Ryan, head of market strategy and global financial services at Ebury.
Equity markets are trading lower and, in currencies, the safe-havens have outperformed most of their peers, he adds. This includes the U.S. dollar, which remains buoyed following some hawkish <a href="https://www.federalreserve.gov/newsevents/speech/powell20240930a.htm">comments</a> from Federal Reserve Chair Jerome Powell on Monday.
The conflict is also causing broader concerns for inflation and central bank policy. Higher oil prices could undermine the U.S. Federal Reserve&#8217;s efforts to control inflation, potentially delaying future interest rate cuts, per <a href="https://www.timesofisrael.com/stock-markets-slump-oil-jumps-as-iran-attack-sparks-fear-of-all-out-war-in-mideast/" target="_blank" rel="noreferrer noopener">The Times of Israel</a>.
What To Look For: Ryan says investors are &#8220;rightly fearful&#8221; that Israel&#8217;s retaliation could disrupt oil supplies. After all, Iran is the seventh-largest oil producer in the world. 
The price of gold and oil both spiked higher after the attack. The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) was trading slightly higher on the day at $72.13 at last check while the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>) is down 0.11% to $245.33 Wednesday. 
&#8220;The wider implication for markets is the rising possibility of a sharp move higher in global oil futures, and another period of elevated energy prices and consumer inflation,&#8221; Ryan says.
The ramifications will not be &#8220;anywhere near as severe&#8221; as those that followed Russia&#8217;s invasion of Ukraine, Ryan adds. &#8220;So far, at least, the moves in markets have been relatively contained.&#8221;
Defense ETFs, as of Wednesday afternoon, were trending up:
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) rose 0.37% to $151.91.</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) is up 0.15% to $116.10. </li>
<li>SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>) is up 0.67% to $159.98. </li>
</ul>
Now Read: 
<ul>
<li><a href="https://www.benzinga.com/news/24/10/41112728/us-boosts-military-presence-in-middle-east-deploys-fighter-squadrons-amid-rising-tensions-with-iran">US Boosts Military Presence In Middle East As Tensions Spike With Iran</a> </li>
</ul>
Image: Shutterstock.

Broad U.S. Equity ETFs

Commodities

ETFs

SPDR Dow Jones Industrial Average ETF Trust

Markets Turn Risk-Off As Israel, Iran Clash: Investors 'Rightly Fearful' Of Oil Disruption, Strategist Says

The Biden administration&#8217;s decision to enhance Ukraine's long-range strike capabilities has U.S. <a href="https://www.benzinga.com/topic/russia-ukraine-war">intelligence agencies on high alert.</a> 
What Happened: President Joe Biden &#8220;decided to provide Ukraine with the Joint Standoff Weapon (JSOW) long-range munition,&#8221; according to a White House <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/09/26/statement-from-president-joe-biden-on-u-s-support-for-ukraine/">statement </a>on Thursday. 
But the New York Times <a href="https://www.nytimes.com/2024/09/26/us/politics/us-ukraine-strikes.html?nl=the-morning&amp;regi_id=136109156&amp;segment_id=178988">reports</a> U.S. intelligence agencies are assessing the risks of such a scenario.
Western allies face the potential threat of Russian-led attacks if those long-range missiles are <a href="https://www.benzinga.com/topic/ukraine">aimed at certain targets</a> deep inside Russia.
The discussions were at the center of Ukrainian President Volodymyr Zelenskyy&#8216;s visit to the U.S. this past week in which he met with Biden and Vice President Kamala Harris.
A meeting between Zelenskyy and ex-President Donald Trump is reportedly taking place on Friday in New York.
Ukraine Winter: The Russia-Ukraine war began on Feb. 24, 2022, when Russia launched a full-scale invasion.
Since then, Russia has bombarded critical power infrastructure across Ukraine — the latest attack being on Thursday, per Reuters. Such tactics, considered war crimes, leave Ukraine&#8217;s citizens vulnerable heading into the winter months. 
&#8220;Due to ongoing attacks on civil infrastructure, front-line movements, mass displacements and disruptions of access to essential health-care services, the war's impacts, compounded by winter, can increase the risk of excess cold-related morbidity and mortality,&#8221; according to a Thursday <a href="https://www.who.int/europe/publications/i/item/WHO-EURO-2024-2946-42704-59552">report</a> from the World Health Organization.
Germany agreed to provide a $78 million winter aid package to help Ukraine maintain heat and electricity.
Federal Development Minister Svenja Schulze <a href="https://defence-industry.eu/germany-supports-ukraine-with-arms-and-winter-package/">said</a> Germany&#8217;s support aligns with national interests, as Ukraine&#8217;s defense also protects European security.
"We are supporting Ukraine in its efforts to rebuild a decentralised power supply infrastructure, as Russia will then not be able to destroy it so easily," he added.
Russia&#8217;s invasion affected oil and gas pipeline relations with Germany and Ukraine starting in 2022. This resulted in major <a href="https://www.benzinga.com/news/22/08/28447445/vladimir-putin-is-waging-war-not-just-against-ukraine-but-against-the-west-expert-warns-as-germany-i">disruptions and geopolitical shifts</a>.
See Also: <a href="https://www.benzinga.com/news/24/09/41037745/mike-johnson-lashes-out-over-weapons-factory-tour-snub-cries-election-interference-to-ukraine-presid">Mike Johnson Lashes Out Over Weapons Factory Tour Snub, Cries Election Interference To Ukraine President — Wants Ambassador Fired</a>
Why It Matters: In the U.S., Democrats and Republicans are at odds over whether to provide aid at all to Zelenskyy. 
Harris, the 2024 Democratic presidential nominee, met with Zelenskyy and criticized those suggesting Ukraine should cede territory for peace. Her comments were seen as a veiled jab at <a href="https://www.benzinga.com/government/21/01/19152983/donald-trump-is-the-first-us-president-to-be-impeached-twice">twice-impeached former President</a> Trump, who often <a href="https://apnews.com/article/trump-zelenskyy-ukraine-russia-6e02fc7575a14d9abb64a326ffd0a4a3">derides</a> efforts to help Ukraine.
At a North Carolina event Wednesday, Trump said Ukraine was &#8220;demolished&#8221; and should have conceded to Russian President Vladimir Putin, the <a href="https://apnews.com/article/donald-trump-ukraine-putin-zelenskyy-0f4d539aa73a943474d779716e5fe42a">Associated Press</a> reported. 
The comments come just weeks after a debate with Harris, in which the 2024 Republican nominee refused to say whether he wanted Ukraine <a href="https://www.benzinga.com/news/24/09/40998738/trump-says-ukrainian-president-backs-kamala-harris-for-white-house-zelenskyy-is-the-greatest-salesma">to win the war</a>. 
Price Action: Defense contractors saw gains and losses on Friday.
<ul>
<li>General Dynamics Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>) is up 0.34% to $301.55</li>
<li>Northrop Grumman Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) rose 034% to $526.08</li>
<li>TransDigm Group Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TDG#NYSE">TDG</a>) declined 0.069% to $1,400.08</li>
</ul>
Exchange-traded funds (ETFs) that hold defense stocks trended up:
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) rose 0.52%</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) is up 0.29%</li>
<li>SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>) is up 0.82%</li>
</ul>
Now Read:
<ul>
<li><a href="https://www.benzinga.com/news/24/09/41059253/trump-set-to-meet-ukraines-president-amid-growing-kyiv-concerns-over-botched-visit-republicans-were">Trump Set To Meet Ukraine&#8217;s President Amid Growing Kyiv Concerns Over Botched Visit</a></li>
</ul>
Photo: Shutterstock

Ukraine Missile Use Worries US Intelligence About Potential Russia Retaliation, Germany Pledges Winter Aid

A significant Ukrainian drone assault on Russia caused an <a href="https://www.benzinga.com/government/24/09/40888451/russia-to-expand-army-for-third-time-since-war-with-ukraine-began-defense-stocks-rtx-northrop-grumma">earthquake-sized eruption</a> at a major arsenal in the Tver region on Wednesday, forcing citizens in the city of Toropets to evacuate, according to reports from war bloggers and some media.
Unverified video and images on social media showed a huge ball of flame rising into the night sky and numerous explosion detonations tearing across a lake about 240 miles west of Moscow, Reuters reported.
NASA satellites registered intense heat sources coming from an area of about five square miles at the site in the early hours. Earthquake monitoring stations picked up the attack as a small earthquake&nbsp;in the area.
&#8220;The enemy hit an ammunition depot in the area of Toropets,&#8221; said Yuri Podolyaka, a Ukrainian-born, pro-Russian military blogger. &#8220;Everything that can burn is already burning there (and exploding).&#8221;
Read Also: <a href="http://US And Allies Worried Amid Reports Of Russia Potentially Sharing Nuclear Secrets With Iran">US And Allies Worried Amid Reports Of Russia Potentially Sharing Nuclear Secrets With Iran</a>
Ukrainian President Volodymyr Zelenskyy, speaking in his nightly video address, praised the attack without mentioning the target.
&#8220;A very important result was achieved last night on Russian territory and such actions weaken the enemy,&#8221; Zelenskyy said. &#8220;I thank everyone involved. Such precision is truly inspiring.&#8221;
A source in Ukraine&#8217;s SBU state security service told Reuters earlier that the drone attack had destroyed&nbsp;a warehouse storing missiles, guided bombs and artillery ammunition.
Igor Rudenya, governor of the Tver region, said Ukrainian drones had been shot down, a fire had broken out and some residents were being evacuated. He did not say what was burning, Reuters reported.
The size of the main blast shown in the unverified social media video was consistent with 200 to 240 tons of high explosives detonating, said George William Herbert of the Middlebury Institute of International Studies at Monterey in California.
Some war bloggers asked how drones could trigger such large blasts at what was thought to be a highly fortified facility.
Price Action: Defense contractors saw gains and losses by the end of Wednesday&#8217;s trading day.
<ul>
<li>General Dynamics Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>) slipped 0.44% to $302.52</li>
<li>Northrop Grumman Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) rose 0.2% to $521.77</li>
<li>TransDigm Group Incorporated (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TDG#NYSE">TDG</a>) declined 0.12% to $1,273.80</li>
</ul>
Exchange-traded funds that hold defense stocks trended up and down.
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) rose 0.06%</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) fell 0.13%</li>
<li>SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>) declined 0.01%</li>
</ul>
Read Now:
<ul>
<li><a href="http://over-30-months-of-war-zelensky">Russia Launches &#8216;One Of The Heaviest Strikes&#8217; On Ukraine In Over 30 Months Of War: Zelensky</a></li>
</ul>
Photo: Shutterstock

Ukrainian Drone Attack Causes Earth-Rattling Blast In Russia's Tver Region

The Boeing Company&#8216;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) credit rating may be <a href="https://www.benzinga.com/news/24/09/40763846/boeing-and-iam-union-strike-deal-potentially-averting-major-strike">lowered to junk </a>as a strike stands to cripple production and cash flow.
Aircraft assembly workers walked off the job early Friday morning after <a href="https://www.benzinga.com/news/24/09/40853982/boeings-stock-falls-as-33-000-aircraft-assembly-workers-strike">rejecting a contract</a> offer presented by Boeing and the International Association of Machinists and Aerospace Workers (IAM) that would have boosted wages by 25% over four years.&nbsp;
The striking machinists produce the 737 Max, Boeing's top-selling airliner, the 777 jet and the 767 cargo plane. The walkout likely will not stop production of Boeing 787 Dreamliners, which are built by nonunion workers in South Carolina, the Associated Press <a href="https://apnews.com/article/boeing-strike-machinists-contract-9f61a7d48675d1c3517233d40d4ec2b1">reported</a>.
Jefferies aerospace analyst Sheila Kahyaoglu estimated a 30-day strike could cost Boeing $1.5 billion.
Moody&#8217;s Investment Ratings on Friday said it will look at how a prolonged strike may impact Boeing&#8217;s ability to raise cash and make the 737 and 787 models.
Read Also: <a href="https://www.benzinga.com/markets/equities/24/09/40847259/boeing-workers-strike-at-midnight-threatens-aircraft-production-as-financial-risks-loom-after-30">Boeing Worker&#8217;s &#8216;Strike At Midnight&#8217; Threatens Aircraft Production As Financial Risks Loom After 30,000 Workers Vote For Industrial Action</a>
&#8220;In our review, we will assess the strike&#8217;s duration and impact on cash flow and the potential equity capital raising Boeing may undertake to bolster its liquidity,&#8221; Moody&#8217;s said.
&#8220;We will also assess the extent to which the strike and ongoing challenges in increasing production of the 737 and 787 aircraft models affect the timing of growth in production rates and the pace and scale of improvements in Boeing&#8217;s operating cash flow.&#8221;
Moody&#8217;s said it will also consider the costs for Boeing to complete the fixed price contracts in the defense business, which will continue to be a drain on earnings and operating cash flow.
Moody&#8217;s rating on Boeing's unsecured debt has stood at Baa3 since April, the lowest rating for the stock to be considered investment grade. 
A downgrade to Boeing&#8217;s credit rating would put it in non-investment grade, or &#8220;junk,&#8221; territory.
Moody&#8217;s noted that Boeing&#8217;s annual free cash flow will fall short of $4 billion in debt coming due in 2025 and the $8 billion due in 2026.
&#8220;The path to restoring compliance, higher quality and strong cash flow in its commercial aircraft assembly operations remains fraught with execution risk,&#8221; Moody&#8217;s said.
Moody&#8217;s pointed out that the IAM members&#8217; 57-day strike in 2008 cost Boeing around $1.5 billion per month, at a time when 737 production was at its then-normal production rate of about 34 per month.
Price Action: Shares of Boeing were down 3.4% to $157.23 at the time of publication Friday.
Exchange-traded funds that hold the stock trended upward on Friday.
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) rose 0.89%.</li>
<li>Gabelli Commercial Aerospace and Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GCAD#NYSE">GCAD</a>) picked up 1.07%.</li>
<li>Direxion Daily Aerospace &amp; Defense Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DFEN#NYSE">DFEN</a>) gained 1.72%.</li>
<li>First Trust Indxx Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MISL#NYSE">MISL</a>) grew 0.84%.</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) went up 0.46%.</li>
</ul>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/general/social-media/24/09/40860859/trump-media-technology-shares-surge-former-president-says-hes-not-selling-or-leaving-truth-s">Trump Media &amp; Technology Shares Surge, Former President Says He&#8217;s &#8216;Not Selling&#8217; Or Leaving Truth Social: &#8216;Elon Would Love Me To Come Over To X&#8217;</a></li>
</ul>
Photo: Shutterstock

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DFEN

Boeing Faces Junk Rating As Moody's Warns Of 'Execution Risk' During Strike

Morgan Stanley is advising investors to pivot towards defensive stocks as the AI market loses momentum. This recommendation comes after a noticeable decline in semiconductor shares.
What Happened: On Tuesday, Mike Wilson, Morgan Stanley&#8217;s chief U.S. equity strategist, <a href="https://youtu.be/l97udx2X7Ws?feature=shared">told</a> Bloomberg Surveillance that the excitement around AI investments has diminished. 
He noted that the semiconductor sector, including major players like Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), has seen significant drops in stock prices.
&#8220;A lot of those stocks have really come off. And that makes sense to me. We just got overcooked on the whole AI theme,&#8221; said Wilson.
Wilson highlighted that semiconductor shares have fallen nearly 7% since Nvidia&#8217;s recent earnings report, with Nvidia itself experiencing a roughly 13% decline. He emphasized that this downturn doesn&#8217;t spell doom for the industry but indicates a longer-term benefit and return.
With the AI rally fading, Wilson suggests that investors should focus on &#8220;quality defensive stocks&#8221; in sectors such as utilities, staples, and healthcare. He believes these areas are well-positioned to perform amid a slowing labor market.
&#8220;With that theme now gone, the market is looking for a new theme. On the growth side, there isn&#8217;t one, so what it does is it hunkers down into defensive, high-quality assets until we get the next thing. Whether that&#8217;s a bad outcome or a positive outcome, they&#8217;re going to hide out in these areas,&#8221; Wilson said.
Investors looking to explore the defense sector may want to consider checking out defense-focused ETFs like Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>), First Trust Indxx Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MISL#NYSE">MISL</a>), SPDR S&amp;P Kensho Future Security ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FITE#NYSE">FITE</a>), iShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>), and SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>).
See Also: <a href="https://www.benzinga.com/news/24/09/40815343/not-a-slam-dunk-for-harris-but-the-chances-of-a-trump-victory-have-slipped-investors-markets-adjust?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">&#8216;Not A Slam Dunk For Harris, But The Chances Of A Trump Victory Have Slipped:&#8217; Investors, Markets Adjust Positions After Presidential Debate</a>
Why It Matters: The shift in Morgan Stanley&#8217;s strategy comes <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40701071/market-bull-warns-of-up-to-10-september-pullback-urges-caution-but-stresses-be-read">amid broader market concerns</a>. Last week, Tom Lee, co-founder and head of research at The Fundstrat, warned of a potential 7%-10% market pullback, citing historical trends that make September a challenging month for stocks.
Adding to the cautious sentiment, Bank of America advised <a href="https://www.benzinga.com/markets/equities/24/09/40787329/analyst-says-dont-buy-the-tech-dip-amid-election-policy-uncertainty-advises-focusing-on-these-se">investors to avoid increasing their exposure</a> to the tech sector due to ongoing market volatility and election-related policy uncertainty. This aligns with Morgan Stanley&#8217;s recommendation to pivot towards more stable, defensive sectors.
Moreover, the Federal Reserve&#8217;s recent actions add another layer of complexity. On Wednesday, economists suggested that the Fed has the green light to cut rates, given the inflation rate fell to its lowest point since February 2021. 
However, JPMorgan cautioned that <a href="https://www.benzinga.com/markets/equities/24/09/40700320/jpmorgan-warns-anticipated-rate-cuts-may-not-significantly-boost-stock-markets-fed-will-start-ea">these cuts might not significantly</a> boost stock markets, as they are likely to be reactive to slowing economic growth.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40787302/nvidia-shares-riding-on-huge-ai-tailwind-says-portfolio-strategist-why-expert-says-?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Nvidia Shares Riding On Huge AI Tailwind, Says Portfolio Strategist: Why Expert Says Stock Will Stay On An Upward Path For Next 2-3 Years</a></li>
</ul>
Image Via Shutterstock 
This story was generated using <a href="https://www.benzinga.com/author/benzinga-neuro">Benzinga Neuro</a> and edited by <a href="https://www.benzinga.com/topic/Kaustubh-Bagalkote" target="_blank" rel="noreferrer noopener">Kaustubh Bagalkote</a>

Morgan Stanley Advises Shift To Defensive Stocks As AI Rally Loses Steam Following Drop In Nvidia And Others: 'We Got Overcooked On The Whole AI Theme'

Boeing Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) may <a href="https://www.benzinga.com/markets/equities/24/08/40541938/nasa-chooses-spacex-over-boeing-for-stranded-astronauts-return-starliners-future-in-doubt">need to delay</a> its annual free cash flow target of $10 billion by two years to 2027-&#8217;28 and come up with $30 billion before it can start designing a new aircraft, said Wells Fargo, which lowered its outlook on the company&#8217;s shares.
Lead analyst Matthew Akers lowered Boeing from<a href="https://www.benzinga.com/news/24/09/40695093/why-boeing-stock-is-nosediving-tuesday"> Equal-Weigh to Underweight </a>and cut the target price from $185 to $119.
Following the downgrade, Boeing&#8217;s shares declined more than 8% to almost a two-year low on Tuesday, Reuters reported. 
Read Also: <a href="https://www.benzinga.com/markets/equities/24/08/40541938/nasa-chooses-spacex-over-boeing-for-stranded-astronauts-return-starliners-future-in-doubt">NASA Chooses SpaceX Over Boeing For Stranded Astronauts&#8217; Return: Starliner&#8217;s Future In Doubt</a>
Akers said Boeing has about $45 billion in net debt that it must address before it starts the next cycle for developing airplanes. Getting rid of that debt would burn its cash flow through 2030, he said.
Boeing is dealing with regulatory limitations on making its 737 MAX aircraft that have burdened free cash flow after a mid-air accident in January.
&#8220;Given a likely new aircraft launch in the next few years, Boeing will need to shore up the balance sheet sooner,&#8221; Akers said in a note. 
&#8220;We estimate a roughly $30 billion equity raise to get back to zero net debt by 2027.&#8221;
Boeing CFO Brian West said during a July earnings call the company would manage its balance sheet in a prudent manner and supplement liquidity as needed.
Boeing&#8217;s free cash flow per share could grow to about $20 this decade if it delayed new planes for &#8220;several more years&#8221; and just paid down debt, Akers said, but that would risk losing market share to rival Airbus SE in the long term.
Price Action: Boeing&#8217;s shares, which have lost about a third of their value this year, declined 7.32% to close at $161.02 on Tuesday. Exchange-traded funds that follow the stock also trended downward.
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) fell 3.42%</li>
<li>Gabelli Commercial Aerospace and Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GCAD#NYSE">GCAD</a>) dipped 2.69%</li>
<li>Direxion Daily Aerospace &amp; Defense Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DFEN#NYSE">DFEN</a>) dropped 10.31%</li>
<li>First Trust Indxx Aerospace &amp; Defense ETF ARCA: MISL) slid 2.73%</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) lost 2.98%</li>
</ul>
Read Now:
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<li><a href="https://www.benzinga.com/news/24/08/40427830/ula-owners-in-talks-to-sell-spacex-rival-to-sierra-space-report">ULA Owners In Talks To Sell SpaceX Rival To Sierra Space: Report</a></li>
</ul>
Photo: Shutterstock

Government

Boeing's Cash Flow Goal May Be Pushed Back, Wells Fargo Says While Lowering Outlook

Looking for broad exposure to the Industrials - Aerospace &amp; Defense segment of the equity market? You should consider the iShares U.S. Aerospace &amp; Defense ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/ita#BATS">ITA</a>), a passively managed exchange traded fund launched on 05/01/2006.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Industrials - Aerospace &amp; Defense is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
<h2>Index Details</h2>
The fund is sponsored by Blackrock. It has amassed assets over $6.64 billion, making it one of the largest ETFs attempting to match the performance of the Industrials - Aerospace &amp; Defense segment of the equity market. ITA seeks to match the performance of the Dow Jones U.S. Select Aerospace &amp; Defense Index before fees and expenses.
The Dow Jones U.S. Select Aerospace &amp; Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market.
<h2>Costs</h2>
When considering an ETF&#39;s total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.40%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.84%.
<h2>Sector Exposure and Top Holdings</h2>
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund&#39;s holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector--about 99.70% of the portfolio.
Looking at individual holdings, Ge Aerospace (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ge#NYSE">GE</a>) accounts for about 18.43% of total assets, followed by Rtx Corp (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/rtx#NYSE">RTX</a>) and Boeing (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ba#NYSE">BA</a>).
The top 10 holdings account for about 76.93% of total assets under management.
<h2>Performance and Risk</h2>
Year-to-date, the iShares U.S. Aerospace &amp; Defense ETF return is roughly 15.22% so far, and it&#39;s up approximately 26.94% over the last 12 months (as of 08/29/2024). ITA has traded between $103.16 and $145.30 in this past 52-week period.
The ETF has a beta of 0.97 and standard deviation of 18.55% for the trailing three-year period, making it a medium risk choice in the space. With about 39 holdings, it has more concentrated exposure than peers.
<h2>Alternatives</h2>
IShares U.S. Aerospace &amp; Defense ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ITA is a great option for investors seeking exposure to the Industrials ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
SPDR S&amp;P Aerospace &amp; Defense ETF (ARCA:XAR) tracks S&amp;P Aerospace &amp; Defense Select Industry Index and the Invesco Aerospace &amp; Defense ETF (ARCA:PPA) tracks SPADE Defense Index. SPDR S&amp;P Aerospace &amp; Defense ETF has $2.30 billion in assets, Invesco Aerospace &amp; Defense ETF has $3.76 billion. XAR has an expense ratio of 0.35% and PPA charges 0.58%.
<a href="https://www.zacks.com/stock/news/2328670/should-you-invest-in-the-ishares-u-s-aerospace-defense-etf-ita?cid=CS-BENZ-FT-sector_etf-2328670">To read this article on Zacks.com click here.</a>

Should You Invest in the iShares U.S. Aerospace & Defense ETF?

At least nine <a href="https://www.benzinga.com/markets/emerging-markets/24/05/39048961/all-eyes-on-rafah-as-israeli-forces-enter-safe-zones-spain-ireland-and-norway-officially">Palestinians were killed</a> on Wednesday, according to Palestinian authorities, as Israeli forces moved into the cities of Jenin and Tulkarm and other areas in the occupied West Bank.
The major attack, which carried out by helicopter and drones, came after smaller raids in the area in recent weeks as Israeli forces tried to defeat Palestinian militant groups, Reuters reported.
Israel is combatting Hamas fighters in Gaza while handling rising tensions with the Iranian-backed Hezbollah movement in southern Lebanon.
The Palestinian health ministry said Israeli troops surrounded Jenin&#8217;s main hospital with earthmounds to block fighters seeking refuge.
Read Also: <a href="https://www.benzinga.com/economics/macro-economic-events/24/08/40416808/oil-prices-drop-as-gaza-ceasefire-talks-progress-china-releases-weak-economic-dat">Oil Prices Drop As Gaza Ceasefire Talks Progress, China Releases Weak Economic Data</a>
Palestine&#8217;s military released the names of five Palestinians identified as militant fighters for Hamas and Islamic Jihad who were killed in Tulkarm on Monday.
In addition to the raids in Jenin and Tulkarm, the military said forces also raided the town of Far&#8217;a near Tubas in the Jordan Valley, killing at least four people in a drone strike.
Battles in the West Bank have risen sharply since the start of the&nbsp;Israel-Hamas War in Gaza.
Thousands of Palestinians have been arrested in raids and more than 660 fighters and civilians have been killed in the West Bank and East Jerusalem since the war in Gaza began almost 11 months ago, according to the Palestinian Health Ministry.
At least 30 Israelis have been killed in attacks in Jerusalem and the West Bank during the period, according to Israeli tallies.
Price Action: Defense companies experienced ups and downs into Wednesday&#8217;s mid-day trading, while exchange-traded funds that hold their stocks trended upward.
<ul>
<li>Lockheed Martin Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>) gained 0.55% to $563.51 </li>
<li>Boeing Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) slipped 1.47% to $170.50</li>
<li>Northrup Grumman (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) ticked down 0.12% to $511.84</li>
<li>iShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) picked up 0.38%</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) went up 0.21%</li>
<li>SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>) rose 0.45%</li>
</ul>
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<li><a href="https://www.benzinga.com/markets/equities/24/08/40325523/oil-prices-soar-to-80-on-middle-east-tensions-us-moves-military-assets-to-region-5-defense-stock">Oil Prices Soar To $80 On Middle East Tensions, US Moves Military Assets To Region: 5 Defense Stocks On The Move</a></li>
</ul>
Image: Dimitrios Karamitros via Shutterstock

Nine Palestinians Killed As Israeli Forces Press Into West Bank

An Alaska Air Group, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ALK#NYSE">ALK</a>) flight headed for Oakland, California, from Seattle was forced<a href="https://www.benzinga.com/markets/equities/24/08/40571260/boeing-sees-strong-demand-for-planes-in-china-expects-fleet-to-double-by-2043"> to turn around </a>Sunday afternoon after the aircraft — made by The Boeing Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) — reportedly experienced engine trouble.
What Happened: The Boeing 737-700 airplane left Seattle-Tacoma International Airport at 12:24 Pacific Day Light Time for Alaska Airlines Flight 1240 but flew back to the airport in just over an hour due to the #1 engine on the plane&#8217;s left side shutting down, Fox Business News <a href="https://www.foxbusiness.com/economy/alaska-airlines-boeing-flight-returns-airport-following-engine-issue">reported</a>.
&nbsp;&#8220;We worked to take care of our guests and accommodate their travel to Oakland yesterday afternoon, and we apologize for the inconvenience,&#8221; Alaska Airlines statement read.
Boeing did not immediately respond to Benzinga&#8217;s request for further comment.
Read Also: <a href="https://feeds2.benzinga.com/markets/equities/24/08/40504636/federal-judge-who-overturned-boeings-72m-verdict-over-stealing-trade-secrets-admits-trading-up-t">Federal Judge Who Overturned Boeing&#8217;s $72M Verdict Over Stealing Trade Secrets Admits Trading Up To $15K In Airplane Maker&#8217;s Stock While Overseeing The Case: &#8216;Could Be Some Market Movement, But It&#8217;s Not Going To Influence My Decision&#8217;</a>
A different aircraft got passengers to Oakland later in the evening, according to flight tracking website FlightAware.&nbsp;
Why It Matters: Boeing has been under intense scrutiny <a href="https://www.benzinga.com/markets/equities/24/05/39009464/boeings-employee-speak-up-on-safety-quality-soar-500-after-737-max-incident-whats-the-benefit">over the safety of its aircraft</a>.
The company is also <a href="https://www.benzinga.com/markets/equities/24/06/39470596/boeing-offers-to-acquire-spirit-aerosystems-in-35-per-share-deal-funded-mostly-by-stock-report">seeking to acquire</a> Spirit AeroSystems (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPR#NYSE">SPR</a>).
Alaska Airlines, meanwhile, is in the process of trying to merge with Hawaiian Holdings, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/HA#NASDAQ">HA</a>).
Alaska Airlines was in the news earlier this year when a Boeing 737-9 MAX door plug blowout occurred during one of their flights in January.&nbsp;
Earlier this summer, the National Traffic Safety Board criticized Boeing for sharing details of the probe into the plug malfunction during a press conference by Elizabeth Lund, senior vice president of quality for Boeing commercial airplanes. 
Price Action: Boeing declined 0.37% to $172.84 by Tuesday&#8217;s mid-afternoon trading, while exchange-traded funds that hold the stock went up for the most part.
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) gained 0.18%</li>
<li>Direxion Daily Aerospace &amp; Defense Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DEFN#NYSE">DEFN</a>) rose 0.58%</li>
<li>Gabelli Commercial Aerospace and Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GCAD#NYSE">GCAD</a>) slid 0.09%</li>
<li>First Trust Indxx Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MISL#NYSE">MISL</a>) went up 0.13%</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) edged up 0.18%</li>
</ul>
Read Now:
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<li><a href="https://www.benzinga.com/markets/equities/24/08/40541938/nasa-chooses-spacex-over-boeing-for-stranded-astronauts-return-starliners-future-in-doubt">NASA Chooses SpaceX Over Boeing For Stranded Astronauts&#8217; Return: Starliner&#8217;s Future In Doubt</a></li>
</ul>

Emles Trust Emles Protective Allocation ETF

DEFN

Boeing 737 Aircraft Experiences Engine Trouble During Alaska Airlines Flight, Forced To Turn Around

Government orders for weapons are expected to increase due to escalating geopolitical tensions, leading to a surge in cash flow for global aerospace and defense companies over the next three years.
What Happened: Vertical Research Partners projected that the top 15 defense contractors worldwide will generate a free cash flow of $52 billion in 2026, nearly double their combined cash flow at the end of 2021, Financial Times <a href="https://www.ft.com/content/5e368d70-b6e2-4433-a747-cdcfab061f27">reported</a> on Monday.
Five leading U.S. defense contractors, excluding Boeing (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>), are projected to produce a cash flow of $26 billion by the end of 2026, more than double the amount in 2021. In Europe, defense giants like BAE Systems, Rheinmetall, and Saab are expected to see a combined cash flow increase of over 40%.
The industry&#8217;s growth is linked to a sharp rise in military spending as governments bolster their budgets in response to Russia&#8217;s invasion of Ukraine and mounting tensions in the Middle East and Asia. The U.S. has allocated nearly $13 billion for weapons production at its five largest defense groups, including Lockheed Martin (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>), RTX (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RTX#NYSE">RTX</a>), Northrop Grumman (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>), Boeing, and General Dynamics (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>), and their suppliers. The UK Ministry of Defence has committed £7.6 billion ($10.03 billion) for military aid to Ukraine over the past three years.
See Also: <a href="https://www.benzinga.com/news/24/08/40544194/robert-kiyosaki-kamala-harris-is-avocado-toast-her-lying-immoral-unethical-days-coming-to-an-end?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Robert Kiyosaki: &#8216;Kamala Harris Is Avocado Toast, Her Lying, Immoral, Unethical Days Coming To An End&#8217;</a>
This surge in government spending has already pushed order books to near-record highs. The industry is now debating how to utilize the growing cash flows, with potential options including share buybacks, dividends, and acquisitions.
Why It Matters: Recent developments in the industry include the Pentagon&#8217;s Defense Innovation Unit&#8217;s plan to boost <a href="https://www.benzinga.com/government/24/04/38335201/pentagons-defense-innovation-unit-to-boost-startups-with-increased-funding-and-support">startups with increased funding</a> and support, Lockheed Martin&#8217;s <a href="https://www.benzinga.com/markets/equities/23/12/36042512/lockheed-martin-doubles-down-on-army-contracts-as-nvidia-microsoft-intel-aid-defense-digitizatio">doubling down on</a> army contracts, and General Dynamics&#8217; <a href="https://www.benzinga.com/markets/equities/24/08/40181006/boost-for-us-defense-industry-general-dynamics-unit-wins-1-3b-contract-modification">$1.3 billion contract modification</a> from the U.S. Department of Defense. 
However,<a href="https://www.benzinga.com/government/24/07/39690807/how-boeings-guilty-plea-could-impact-us-defense-contracts"> Boeing&#8217;s negotiations with</a> the U.S. Defense Department following its guilty plea could potentially impact its ability to secure future contracts.
Price Action: During Monday&#8217;s pre-market, Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) was trading 0.03% lower while SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>) was trading 0.05% higher, as per <a href="https://pro.benzinga.com">Benzinga Pro</a>.
Read Next: 
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<li><a href="https://www.benzinga.com/news/24/08/40541951/mary-trump-offers-debate-strategy-for-kamala-harris-let-people-see-what-a-petty-small-insecure-weak?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Mary Trump Offers Debate Strategy For Kamala Harris: Let People &#8216;See What A Petty, Small, Insecure, Weak &nbsp;Man Donald Trump Really Is&#8217;</a></li>
</ul>
Photo courtesy: Lockheed Martin
This story was generated using <a href="https://www.benzinga.com/author/benzinga-neuro">Benzinga Neuro</a> and edited by <a href="https://www.benzinga.com/topic/Pooja-Rajkumari" target="_blank" rel="noreferrer noopener">Pooja Rajkumari</a>

General

Lockheed Martin, RTX And Other Defense Companies To Reap Record Cash Flow Of $52B Amid Rising Geopolitical Tensions: Report

President Volodomyr Zelenskyy said <a href="https://www.benzinga.com/government/24/08/40352731/russia-strikes-back-at-ukraines-ground-incursion-into-kursk">Ukrainian forces have captured</a> another Russian village while visiting the border where his troops crossed into Russia&#8217;s Kursk region in early August, while Moscow said its ground forces have taken control of a village in eastern Ukraine.
Kyiv has also reported carrying out a drone strike on an air base in southern Russia, but Russia said it had pushed back an effort by Ukrainian forces to cross the border in an area 150 miles from the site of Ukraine&#8217;s incursion into Kursk on Aug. 6, Reuters reported.
Kyiv has announced that its ground forces have won a series of battles since the advance into Kursk, but Russian forces have been slowly but steadily moving farther into eastern Ukraine for months. 
On Thursday, the Russian defense ministry said forces had seized the village of Mezhove in Ukraine&#8217;s eastern Donetsk region.
Read Also: <a href="https://www.benzinga.com/news/24/08/40330846/russian-president-blames-ukraine-of-sabotaging-peace-talks-through-border-incursion-says-enemy-will">Russian President Blames Ukraine Of Sabotaging Peace Talks Through Border Incursion, Says &#8216;Enemy Will Certainly Receive A Worthy Response&#8217;</a>
Reuters could not independently confirm the latest battlefield reports from Kyiv or Moscow. Russia has repeatedly said its forces have stopped the Ukrainian incursion, but Kyiv has kept saying that its troops are making more advances into Russia.
Zelenskyy said in a statement, there had been less shelling and civilian casualties in Ukraine&#8217;s Sumy region since the Kursk operation. He also said Ukrainian forces captured one more Russian village, after Ukrainian officials said Kyiv controls more than 90 settlements in Kursk.
A security source in Kyiv said Ukraine had also carried out a drone attack on Russia&#8217;s Marinovka military airfield in Volgograd in southern Russia, hitting a storage site for fuel and glide bombs.
Russia&#8217;s defense ministry said it had shot down 28 drones over Russian territory.
The Ukrainian military&#8217;s general staff said Russian troops carried out 53 attacks and offensive actions on the front to the east of the transport hub of Pokrovsk in the last 24 hours.
The Ukrainian navy said its forces attacked a Russian ammunition and fuel storage site on the Moscow-held Kinburn Spit that juts out into the Black Sea in occupied southern Ukraine.
Price Action: Defense stocks moved upward during Thursday&#8217;s late-morning trading session.
<ul>
<li>RTX Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RTX#NYSE">RTX</a>) gained 0.31% to $117.62</li>
<li>Lockheed Martin Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>) rose 0.43% to $556.14</li>
<li>Northrup Grumman Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>) went up 0.55% to $509.65</li>
</ul>
Exchange-traded funds that track defense stocks also saw gains at the time of publication Thursday.
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) rose 0.22%</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) gained 0.09%</li>
<li>SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>) improved 0.13%</li>
</ul>
Read Now:
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<li><a href="https://www.benzinga.com/news/24/08/40321861/russia-evacuates-civilians-from-border-as-ukraine-continues-ground-offensive">Russia Evacuates Civilians From Border As Ukraine Continues Ground Offensive</a></li>
</ul>
Photo: Shutterstock

Eurozone

Zelenskyy Announces Capture Of Another Russian Village As Ukraine Pushes Deeper Into Kursk

The possibility of Donald Trump&#8216;s return to the White House has triggered a surge in investments in European defense-tech startups, as per industry executives and investors.
What Happened: Trump&#8217;s unpredictable approach towards NATO and defense budgets has led to a rise in military spending and investment in defense-tech startups across Europe. The former president is currently in a tight race with Vice President Kamala Harris for the Nov. 5 election, Reuters reported on Thursday.
Global military spending hit a record high of $2.4 trillion in 2023, according to the Stockholm International Peace Research Institute (SIPRI). In June, the NATO Innovation Fund (NIF) announced partnerships with venture capital firms and defense startups across Europe, aiming to strengthen security in the region. The European Union also pledged over $1 billion towards military innovation earlier this year.
While the potential of a Trump presidency wasn&#8217;t the only factor driving these initiatives, it has significantly influenced investments in manufacturers of drones, robotics, and quantum computing, according to eight industry executives.
See Also: <a href="https://www.benzinga.com/news/24/08/40453368/bernie-sanders-trump-labeled-kamala-harris-an-extreme-communist-on-her-price-gauging-plan-but-doesnt?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Bernie Sanders: Trump Labeled Kamala Harris An &#8216;Extreme Communist&#8217; On Her Price Gauging Plan, But Doesn&#8217;t  Matter What He Says, No One Believes Him</a>
One of the leading investors is Munich-based Vsquared Ventures, which recently raised a 214 million euro ($237.99 million) fund to invest in space, robotics, and other technologies. 
&#8220;Trump&#8217;s threats have made European states think very differently about investing in their own capabilities and giving contracts out, often to startups,&#8221; said Herbert Mangesius, founding partner at Vsquared.
Currently, the NIF is backed by 24 NATO countries, with eight remaining countries &#8211; including Canada and the U.S. &#8211; not involved. Andrea Traversone, the organization&#8217;s managing partner, expressed his ambition to have all NATO allies join the fund.
Defense and security spending across Europe rose 16% to 552 billion euros since 2022, as per SIPRI data. This increase in spending has resulted in governments partnering with new technology companies and investing more in their defense capabilities.
Why It Matters: Trump&#8217;s potential return and his past comments <a href="https://www.benzinga.com/news/24/02/37061734/biden-says-if-trump-able-to-gain-power-again-he-will-let-russia-do-whatever-the-hell-they-want-with">concerning NATO allies </a>and defense spending have raised concerns among European nations. Trump hinted that the U.S. might not defend NATO allies who fail to meet their defense spending targets against a potential Russian invasion. 
These comments, coupled with escalating tensions with Russia and China, have led to a <a href="https://www.benzinga.com/government/24/04/38155210/western-nations-may-face-10-trillion-defense-spending-surge-amid-russia-china-threat-report">surge in defense spending</a> by Western nations, which could surpass $10 trillion in the next decade. 
Price Action: In the U.S., defense ETFs such as Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) was trading 0.19% higher at $111.02, SPDR S&amp;P Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XAR#NYSE">XAR</a>) was trading 0.17% higher at $152.29 while iShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) was trading 0.28% higher at $144.30, according to <a href="https://pro.benzinga.com">Benzinga Pro.</a>
Did You Know?
<ul>
<li>Congress Is Making Huge Investments. <a href="https://www.benzinga.com/gov-trades" target="_blank" rel="noreferrer noopener">Get Tips On What They Bought And Sold Ahead Of The 2024 Election With Our Easy-to-Use Tool</a></li>
</ul>
Image via Shutterstock
This story was generated using <a href="https://www.benzinga.com/author/benzinga-neuro">Benzinga Neuro</a> and edited by <a href="https://www.benzinga.com/topic/Pooja-Rajkumari" target="_blank" rel="noreferrer noopener">Pooja Rajkumari</a>

Startups

Trump's Potential Return Triggers Investors' Demand For European Defense Startups

RTX Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RTX#NYSE">RTX</a>) has developed an air-to-air missile that could give the U.S. an <a href="https://www.benzinga.com/news/24/05/38632421/chinas-growing-missile-arsenal-is-putting-us-officials-on-edge">upper hand against China</a>.
The AIM-174B, which has the longest range of any U.S. missile and is a further development of the Raytheon SM-6 air defense missile, can reach targets as far away as 250 miles, Reuters reported.
The new missile exceeds the striking distance of the AIM-120 AMRAAM missile, which is also made by RTX, by 157 miles and can therefore outrange China&#8217;s PL-15 missile and allow U.S. jets to stay closer to aircraft carriers that they are protecting.
Read Also:<a href="https://www.benzinga.com/news/global/24/07/39733693/raytheon-awarded-1-2b-patriot-contract-for-germany-as-ukraine-asks-for-support"> Raytheon Awarded $1.2B Patriot Contract For Germany As Ukraine Asks For Support</a>
The AIM-174B, which the U.S. has been deployed to the Indo-Pacific region and was officially acknowledged in July, does not require new production lines and is compatible with the aircraft of U.S. ally Australia.
&#8220;The United States can ensure the safety of their important assets, such as carrier groups, and launch long-range strikes on PLA targets,&#8221; Chieh Chung, a researcher at Taipei-based thinktank Association of Strategic Foresight, told Reuters. 
PLA stands for People&#8217;s Liberation Army.
Almost three weeks ago, RTX reported second-quarter results that beat analyst expectations. 
The company posted $19.791 billion in revenue for the three-month period to exceed analyst consensus of $19.28 billion. Adjusted EPS grew 9% to $1.41, beating consensus of $1.30.
Price Action: RTX rose 0.59% to $117.55 by Wednesday&#8217;s late-afternoon trading
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) gained 0.33%</li>
<li>Direxion Daily Aerospace &amp; Defense Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DFEN#NYSE">DFEN</a>) went up 0.69%</li>
<li>First Trust Indxx Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MISL#NYSE">MISL</a>) increased 0.47%</li>
<li>Global X Defense Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SHLD#NYSE">SHLD</a>) rose 1.17%</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) edged up 0.49%</li>
</ul>
Read Now:
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<li><a href="https://www.benzinga.com/news/24/04/38522456/russian-defense-systems-intercept-six-us-made-missiles-launched-by-ukraine">Russian Defense Systems Intercept Six US-Made Missiles Launched By Ukraine</a></li>
</ul>

Asia

SHLD

RTX Develops Longest-Range Air-To-Air Missile That Could Give US Advantage In South China Sea

Russia removed civilians on Monday from a second area bordering Ukraine as Kyiv continues <a href="http://While World Watches The Middle East, Ukraine Pushes Into Russian Territory">a ground incursion </a>into Russian territory.
Ukraine&#8217;s military advanced across the Russian border last Tuesday and into the western area of Kursk in an unexpected offensive that may be an effort to boost its position in possible ceasefire talks after the U.S. election in November.
Russia gained some control of the region by Sunday, but Ukraine continued to battle Russian forces there on Monday, according to Russian war bloggers, Reuters reported.
Evacuations began on Monday from the Krasnaya Yaruga District in the adjoining Belgorod region to the south due to Ukraine&#8217;s ground offensive into Russia.
Alexei Smirnov, Kursk&#8217;s acting governor, said in a meeting with President Vladimir Putin that Ukraine controlled 22 settlements in the region, and that the incursion was about 7.5 miles deep and 25 miles wide.
Read Also: <a href="https://www.benzinga.com/news/24/07/39700167/zelenskyy-lands-in-washington-as-nato-summit-puts-ukraine-aid-first">Zelenskyy Lands In Washington As NATO Summit Puts Ukraine Aid First</a>
Ukrainian forces in Kursk were trying to encircle Sudzha, according to the bloggers, where Russian natural gas flows into Ukraine, while major battles were taking place about 14 miles from the border near Korenevo, and in Martynovka.
Since Ukraine&#8217;s Aug. 6 border incursion into Kursk, the Russian rouble has lost 6% of its value against the U.S. dollar. Russia&#8217;s Gazprom said it would send 39.6 million cubic meters of gas to Europe via Ukraine on Monday.
The U.S. is sending Ukraine an additional $125 million in weapons, including Stinger missiles, 155mm and 105mm artillery ammunition, High Mobility Artillery Rocket Systems (HIMARS) ammunition and vehicles. The U.S. has given $55.6 billion in aid to Ukraine since the conflict began in February 2022, ABC News <a href="https://abcnews.go.com/US/wireStory/us-announces-125-million-military-aid-package-ukraine-112726415">reported</a>.
Price Action: U.S. ammunition manufacturers that send munitions to Ukraine were trending upward by Monday&#8217;s early-afternoon trading.
<ul>
<li>RTX Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RTX#NYSE">RTX</a>), a company also known as Raytheon which makes Stinger missiles, gained 0.53% to $116.77</li>
<li>Lockheed Martin Corporation, (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>) which makes HIMARS artillery, ticked up 0.65% to $555.15</li>
<li>The Spade Defense Index (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DXS#NYSE">DXS</a>), which serves as a benchmark for firms in the defense, homeland security and defense sectors and is tracked by the Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>), slipped 0.37%</li>
</ul>
Read Now: 
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<li><a href="https://feeds2.benzinga.com/top-stories/24/07/39964479/airspace-breaches-possible-nato-destabilization-latest-on-russia-ukraine-war-ahead-of-us-election">Airspace Breaches, Possible NATO Destabilization: Latest On Russia-Ukraine War Ahead Of US Election</a></li>
</ul>
Photo: Shutterstock

Russia Evacuates Civilians From Border As Ukraine Continues Ground Offensive

The Federal Aviation Administration has proposed requiring The Boeing Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BA#NYSE">BA</a>) to conduct <a href="http://The missed inspection occurred after Boeing's 737 Max airplanes were grounded earlier this year for a second time after a door flew off during an Alaskan Airlines flight.">maintenance record checks</a> or inspections of some of its 787 Dreamliners after the company reported missing a test on a part to the main landing gear.
The FAA has recommended a new airworthiness directive for all of Boeing&#8217;s Model 787-8, 787-9, and 787-10 airplanes after Boeing reported that drag brace lower lock link assemblies, which lock landing gear into place for landing, were not inspected during manufacture, <a href="https://www.federalregister.gov/documents/2024/08/01/2024-16975/airworthiness-directives-the-boeing-company-airplanes">according</a> to a document in the U.S. Federal Register.
&#8220;The FAA is proposing this AD to address the unsafe condition on these products,&#8221; the document said.
An investigation determined that the missed inspection was caused by &#8220;human error&#8221; isolated to a single technician.
&#8220;Undetected cracks could lead to fracture of the drag brace lower lock link assembly,&#8221; the document stated. 
&#8220;This condition, if not addressed, could lead to MLG collapse, which could result in loss of directional control while the airplane is on the ground, with the potential for off-runway excursion or penetration of the wing box fuel tank.&#8221;
Read Also: <a href="https://www.benzinga.com/24/07/39567358/boeing-to-acquire-spirit-aerosystems-for-4-7b-after-months-of-negotiations">Boeing To Acquire Spirit Aerosystems For $4.7B After Months Of Negotiations</a>
The FAA estimated that the directive would affect 156 U.S.-registered airplanes, if adopted as proposed.
The missed inspection occurred after Boeing&#8217;s 737 Max airplanes were grounded earlier this year for a second time after a door flew off during an Alaskan Airlines flight. 
The planes were previously grounded from March 2019 to December 2020 after two crashes that killed a total of 346 people.
In July, Boeing acquired Spirit Aerosystems for $4.7 billion, pled guilty to criminal charges related to the two fatal plane crashes and appointed Robert Ortberg as its new CEO.
Price Action: Shares of Boeing finished 6.45% lower at $178.31 on Thursday. Several exchange-traded funds that hold the stock also declined.
<ul>
<li>IShares U.S. Aerospace &amp; Defense ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITA#BATS">ITA</a>) lost 1.3%</li>
<li>Direxion Daily Aerospace &amp; Defense Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DFEN#NYSE">DFEN</a>) dropped 3.9%</li>
<li>First Trust Indxx Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MISL#NYSE">MISL</a>) lost 2.2%</li>
<li>Gabelli Commercial Aerospace And Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GCAD#NYSE">GCAD</a>) fell 1.8%</li>
<li>Invesco Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PPA#NYSE">PPA</a>) slipped 1.5%</li>
</ul>
Read Now:
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<li><a href="https://www.benzinga.com/markets/equities/24/07/39633208/former-boeing-inspector-says-scrap-parts-were-used-in-planes-for-over-a-decade-report">Former Boeing Inspector Says Scrap Parts Were Used In Planes For Over A Decade: Report</a></li>
</ul>
Photo: Shutterstock

FAA Proposes Mandatory Maintenance Checks For Some Boeing 787 Dreamliners

As military spending surges around the world, defense ETFs offer investors a unique opportunity to hedge against market volatility while capitalizing on booming defense sectors. Therefore, it might be wise to invest in fundamentally solid defense ETFs, such as SPDR S&P Aerospace & Defense ETF (XAR), Invesco Aerospace & Defense ETF (PPA), and iShares U.S. Aerospace & Defense ETF (ITA). Continue reading… As global tension and geopolitical conflicts rise around the world, the defense industry is gaining much attention among investors. Driving the robust demand for defense products, the sector is rapidly fueling the market.
Given the industry's robust prospects, investing in ETFs like SPDR S&amp;P Aerospace &amp; Defense ETF (<a href="https://stocknews.com/stock/XAR/">XAR</a>), Invesco Aerospace &amp; Defense ETF (<a href="https://stocknews.com/stock/PPA/">PPA</a>), and iShares U.S. Aerospace &amp; Defense ETF (<a href="https://stocknews.com/stock/ITA/">ITA</a>) might be wise choices for those looking to gain exposure to the tech sector.
Events like the Russia-Ukraine conflict and the rising military presence in the Asia-Pacific region have spurred countries to increase defense spending, with NATO members now aiming to allocate <a href="https://www.fidelity.com/learning-center/trading-investing/defense-stock-outlook">at least 2% of GDP toward military budgets</a>, and this increased military investments, driving demand for aerospace, cybersecurity and defense companies.
Simultaneously, <a href="https://www.usaspending.gov/agency/department-of-defense?fy=2024">the U.S. Department of Defense (DOD)</a> allocated a $2.10 trillion budget for fiscal year 2024, with $1.08 trillion for defense-related expenses. As per the Business Research Co. report, the global defense industry is anticipated to <a href="https://www.thebusinessresearchcompany.com/report/defense-global-market-report">exhibit a CAGR of 5.8%</a> by 2028.
Investors see defense ETFs not only as a way to gain exposure to these trends but also as a hedge against market volatility caused by geopolitical instability.
With that in mind, let's look at the fundamentals of the top three <a href="https://stocknews.com/category/industrials-equities-etfs/">Industrials Equities ETFs</a>, beginning with number 3.
ETF #3: SPDR S&amp;P Aerospace &amp; Defense ETF (<a href="https://stocknews.com/stock/XAR/">XAR</a>)
XAR seeks to invest in companies' stocks operating across the industrial, capital goods, aerospace, and defense sectors. The fund tracks the performance of the S&amp;P Aerospace &amp; Defense Select Industry Index.
As of October 24, 2024, the fund had <a href="https://www.investopedia.com/terms/a/aum.asp">assets under management (AUM)</a> of $2.39 billion and an <a href="https://www.ssga.com/us/en/intermediary/etfs/spdr-sp-aerospace-defense-etf-xar">NAV of $158.71</a>. XAR has an expense ratio of 0.35%, lower than the category average of 0.47%.
The fund's top holdings include Axon Enterprise Inc. (<a href="https://stocknews.com/stock/AXON/">AXON</a>) with a 5.18% weighting, Curtiss-Wright Corporation (<a href="https://stocknews.com/stock/CW/">CW</a>) at 5.02%, and Howmet Aerospace Inc. (<a href="https://stocknews.com/stock/HWM/">HWM</a>), and L3Harris Technologies Inc. (<a href="https://stocknews.com/stock/LHX/">LHX</a>) at 4.80% and 4.76%, respectively. It currently has a total of 33 holdings.
The fund pays an annual dividend of $0.87, translating to a 0.55% yield at the prevailing price level. The fund's four-year average yield is 0.58%.
XAR has gained 39.1% over the past year and 21.2% over the past nine months to close the last trading session at $158.65. Its fund inflows came in at $82.12 million over the past month and $275.45 million over the past year.
XAR's <a href="https://stocknews.com/powr-ratings/">POWR Ratings</a> reflect its promising prospects. The ETF has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It also has an A grade for Trade and Buy &amp; Hold and a B for Peer. Of the 36 ETFs in the B-rated <a href="https://stocknews.com/category/industrials-equities-etfs/">Industrials Equities ETFs</a> group, XAR is ranked #10. To access all of XAR's POWR Ratings, <a href="https://stocknews.com/stock/XAR/">click here</a>.
ETF #2: Invesco Aerospace &amp; Defense ETF (<a href="https://stocknews.com/stock/PPA/">PPA</a>)
PPA invests in stocks of companies operating across aerospace and defense sectors and tracks the SPADE Defense Index. Invesco Capital Management LLC manages this fund.
With $4.50 billion in AUM, its <a href="https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&amp;ticker=PPA">top holdings</a> are RTX Corporation (<a href="https://stocknews.com/stock/RTX/">RTX</a>) with a 7.67% weighting in the fund, Boeing Company (<a href="https://stocknews.com/stock/BA/">BA</a>) at 7.17% weight, followed by Lockheed Martin Corporation (<a href="https://stocknews.com/stock/LMT/">LMT</a>), and General Electric Co (<a href="https://stocknews.com/stock/GE/">GE</a>) with 7.12% and 6.91% weightings, respectively. The ETF has a total of 55 holdings.
The ETF's expense ratio is 0.58%, compared to the category average of 0.47%. PPA fund inflows were $1.31 billion over the past year and $617.25 million over the past three months.
PPA pays an annual dividend of $0.65, which translates to a 0.56% yield at the current price level. The fund's dividend payouts have grown at a 15.2% CAGR over the past three years. Its four-year average yield is 0.69%.
Over the past year, PPA has gained 44.1% to close the last trading session at $116.42. The fund's NAV was $116.24 as of October 24, 2024.
PPA's solid fundamentals are reflected in its POWR Ratings. The fund has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
The fund has an A grade for Trade and Buy &amp; Hold and a B for Peer. PPA is ranked #6 in the same B-rated group. <a href="https://stocknews.com/stock/PPA/">Click here</a> to access all the PPA ratings.
ETF #1: iShares U.S. Aerospace &amp; Defense ETF (<a href="https://stocknews.com/stock/ITA/">ITA</a>)
BlackRock Fund Advisors manages ITA. The fund invests in growth and value stocks of companies that are operating across industrials, capital goods, aerospace, and defense sectors. It seeks to track the performance of the Dow Jones U.S. Select Aerospace &amp; Defense Index.
As of October 24, ITA had $6.25 billion in assets under management and an NAV of $149.29. Its expense ratio of 0.40% compares to the category average of 0.47%.
The fund's <a href="https://www.ishares.com/us/products/239502/ishares-us-aerospace-defense-etf#:~:text=88.00-,Holdings,-All">top holdings</a> include GE with an 18.48% weight, RTX with a 15.87% weight, LMT with a 10.61% weight, and AXON with a 5.18% weight. It has a total of 35 holdings.
ITA's trailing-12-month dividend of $1.23 yields 0.81% on the current price level, while its four-year average dividend yield is 0.93%. Its dividend payouts have grown at an 11.34% CAGR over the past three years.
Over the past month, the fund's net inflow came in at $98.69 million. It has gained 39.9% over the past year to close its last trading session at $149.39.
ITA's promising outlook is reflected in its POWR Ratings. The ETF has an overall A rating, equating to a Strong Buy in our proprietary rating system.
It has an A grade for Trade and Buy &amp; Hold. It is ranked #3 out of 36 ETFs in the same Industrials Equities ETFs group. To see ITA's POWR ratings, <a href="https://stocknews.com/stock/ITA/">click here</a>.
What To Do Next?
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<hr />
ITA shares were trading at $149.59 per share on Friday afternoon, up $0.20 (+0.13%). Year-to-date, ITA has gained 18.84%, versus a 23.14% rise in the benchmark S&amp;P 500 index during the same period.
<hr><div style="clear:both;"></div> <h2>About the Author: ShreyaRathi</h2> <img src='https:/wp-content/uploads/2024/10/0.jpeg' style="float:left; padding:5px;width:125px;"><a href="https://stocknews.com/authors/?author=shreya-rathi">More...</a>The post <a href=https://stocknews.com/news/ita-ppa-xar-3-defense-etfs-to-watch-as-global-tensions-rise/>3 Defense ETFs to Watch as Global Tensions Rise</a> appeared first on <a href=https://stocknews.com/>StockNews.com</a>

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