Gun Stocks Are on the Rise, While 2 Communications Stocks Are Rallying After Cancelled Merger

U.S stocks have opened higher today, spurred on by a better than expected jobs report. After last month’s report brought fear and anxiety to the market, today’s report has calmed investors, providing further proof that the economy is on the right path.

During the month of June, approximately 287,000 jobs were created in the U.S, toppling economists’ estimates of 175,000 jobs. However, the unemployment rate rose slightly, to 4.9%, while economists were expecting it to rise to 4.8%. The Dallas shooting has also had an impact on several stocks, an aspect we’ll discuss below.

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Gun Stocks Blazing

Gun stocks are flying high this morning in the wake of the Dallas shootings, in which five Dallas police officers were killed and seven more were injured by snipers during a Black Lives Matter protest against police violence.  Smith & Wesson Holding Corp (NASDAQ:SWHC) shares opened 5% higher today, while Sturm, Ruger & Company (NYSE:RGR)‘s stock is 4% in the green. Investors’ reaction to the news is typical, as gun stocks often soar after mass shootings which are perceived as a trigger for increased demand for firearms from customers purchasing guns and ammunition for self protection, as well as existing gun owners adding to their arsenal in the event that gun control legislation is voted in. Less than a month ago, Smith & Wesson Holding Corp (NASDAQ:SWHC) jumped by 6.9% and Sturm, Ruger & Company (NYSE:RGR) surged by 8.5% after 49 people were killed at a nightclub in Orlando.

Hedge fund sentiment towards Smith & Wesson Holding Corp (NASDAQ:SWHC) took a turn for the worse during the first quarter, with the number of funds invested in the company having fallen to 24, down from 27 registered at the end of 2015. The number of funds holding Sturm, Ruger & Company (NYSE:RGR) in their equity portfolios was unchanged during the first quarter at 27. Ken Griffin‘s Citadel Investment Group was invested in both stocks but was exhibiting different sentiment towards them. In its latest 13F filing, the fund reported a 21% reduction in its holding of Smith & Wesson, to 335,136 shares and a 110% increase to its stake in Sturm, Ruger & Company, to 75,983 shares.

On the next page we’ll take a look at a merger agreement that ended prematurely and how a furniture company performed during the second quarter.