Gun shares rise after Orlando shooting
In the wake of mass shootings, fears of new gun controls spur people to buy guns and shares of companies that manufacture them.
Ted S. Warren/AP
Shares of U.S. firearm makers surged on Monday as renewed fears of tighter gun control after the deadliest mass shooting in U.S. history led to expectations of a spike in firearm sales.
Smith & Wesson Holding Corp's shares rose as much as 11.6 percent, while those of Sturm Ruger & Co Inc jumped 10.7 percent.
A man armed with an assault rifle and pledging loyalty to Islamic State killed 50 people during a gay pride celebration at a nightclub in Orlando, Florida early on Sunday.
The rampage, by New York-born Florida resident Omar Mateen, was denounced by President Barack Obama, who had previously blasted Congressional inaction on gun control.
Gun sales jumped in January after President Obama vowed to use executive powers to expand background checks for buyers and bolster licensing requirements for dealers.
The Orlando shooting is also nearly certain to reignite emotional debates over American gun laws and homeland security in what is shaping up to be a vitriolic U.S. presidential campaign between Democrat Hillary Clinton and Republican Donald Trump.
However, several gun shop owners and managers interviewed by Reuters said they were yet to see an increase in gun sales or ammunition following Sunday's shooting.
"It's been a regular Monday," said Edward Pepper, the owner of Belle, Missouri-based Osage County Guns.
Pepper said he had not seen a spike in gun sales, unlike in the aftermath of the Sandy Hook Elementary School shooting in Newtown, Connecticut in 2012.
People seem to have come to terms with the idea that there is no government effort to take away guns, he said.
Wolf Laughlin, the manager of Helotes, Texas-based Gun Shack, said that business was actually slower than usual, perhaps because people were waiting for government response to the shooting.
However, BB&T Capital Markets analyst Brian Ruttenbur, citing an industry contact, said media coverage and recent statements by politicians on the events over the weekend were spurring buying of military style rifles.
If the buying momentum is sustained, it could result in a pickup in manufacturing orders, which were expected to slow this year due to decreasing consumer demand, he said.
Smith & Wesson shares were up 6.6 percent at $22.82 in late afternoon trading, while Sturm Ruger's shares were up 8.3 percent at $62.16.
Up to Friday's close, Smith & Wesson's stock had risen 39 percent in the past 12 months, while Sturm Ruger's shares had risen about 6 percent.
(Reporting by Subrat Patnaik and Sruthi Ramakrishnan in Bengaluru and Marcus Howard in New York; Editing by Anil D'Silva, Sriraj Kalluvila and Kirti Pandey)