Two days of military success against Iraq continued to boost several defense companies Friday on Wall Street as investors appeared to take in stride the impact of Iraq's surprise missile attack on Israel.
"With the attack on Israel, people have certainly realized that there are going to be setbacks and advances," said defense analyst Lawrence Harris of Kemper Securities Group in Los Angeles. "I think there's a lot more realism today (Friday) than there was yesterday."Friday's big winner among defense stocks was Raytheon, of Lexington, Mass., producer of the Patriot missile, which shot down a Soviet-made Scud missile early Friday over Saudi Arabia - the first combat use of the Patriot.
"The Patriot's performance was very impressive - it was like trying to hit a bullet with a bullet," said Paul Nisbet, defense analyst with Prudential Bache Securities. The Patriot, which is 17 feet long with a top speed of Mach 3.7, was first produced in 1980 at the company's plant in Andover, Mass.
The stock gained 13/4 to 701/4 a share in afternoon trading on the New York Stock Exchange after closing off 11/4 Thursday as part of a decline in defense electronics stocks, which had run up earlier in the week in anticipation of the war.
General Dynamics Corp., which produced the Tomahawk cruise missiles that successfully opened Wednesday night's attack, and McDonnell Douglas, a second-source Tomahawk supplier and builder of the F-15 and F-A-18 jet fighters, also gained for the second straight day. General Dynamics was up 15/8 to 25 and McDonnell Douglas gained 11/2 to 31 5/8 in afternoon trading.
TRW Inc., supplier of military satellites that have mapped out Iraq's targets, was another winner on Friday, up 21/8 to 391/8.
Analyst Michael Lauer of Kidder Peabody said the war results so far represent a "vindication" of the much-criticized high-tech weapons produced by the nation's defense industry.