Defense Contractor Shares Stumbling

General Dynamics (GD_) and Northrop Grumman(NOC_) shares were falling Wednesday as the defense companies were caught in the turmoil in Washington's debt-ceiling talks that likely will result in cuts in military spending.

General Dynamics was at $69.03, down 1.83% for the day; the stock is down 0.9% for all of 2011. Northrop Grumman shares were $63.35, down 3.1%. For 2011, the stock is up 11.23%.

"Although it is not yet certain today how or when the debt ceiling is raised, it is clear that defense spending will play a role in helping to ease the country's economic challenges," said Jay Johnson, General Dynamics chief executive, on a conference call with analysts.

Congress had not agreed on a budget on Wednesday, as politicians on Capitol Hill raced to make changes to their plans.

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- Posted: 2011-07-27 13:02:52

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