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Orlando Shooting Incident Results in Jump in US Firearms Maker’s Shares


06/14/2016


Orlando Shooting Incident Results in Jump in US Firearms Maker’s Shares
Expectations of a spike in firearm sales led to the shares of U.S. firearm makers surging following wide spread and renewed fears of tighter gun control after the deadliest mass shooting in U.S. history in Orlando.

While the sale of Sturm Ruger & Co Inc  jumped 10.7 percent, the sale of firearms at the Smith & Wesson Holding Corp's stores made the company shares jump by as much as 11.6 percent.
 
50 people were killed during a gay pride celebration at a nightclub in Orlando, Florida early on Sunday by a man armed with an assault rifle and pledging loyalty to Islamic State.
 
President Barack Obama, who had previously blasted Congressional inaction on gun control, denounced the rampage that was carried out by New York-born Florida resident Omar Mateen.
 
Following the announcement by President Barack Obama in January when he vowed to bolster licensing requirements for dealers and to use executive powers to expand background checks for buyers, there was a sudden increase in gun sales in the United States resulting from fear about enhanced restrictions on gun purchase.
 
Emotional debates over American gun laws and homeland security is expected to be reignited by the Orlando shooting. This debate is expected to assume importance in what is shaping up to be a vitriolic U.S. presidential campaign between Democrat Hillary Clinton and Republican Donald Trump.
 
However there were media reports and interviews of several gun sellers in the US who reportedly are yet to see an increase in gun sales or ammunition following Sunday's shooting.
"It's been a regular Monday," Edward Pepper, the owner of Belle, Missouri-based Osage County Guns told Reuters.
 
Unlike in the aftermath of the Sandy Hook Elementary School shooting in Newtown, Connecticut in 2012, he had not seen a spike in gun sales following Orlando’s incident, Pepper said.
 
He added that the idea that there is no government effort to take away guns seems to have become the general understanding of the people of America from the previous incidents’ aftermath and subsequent government rhetoric and government inaction on the issue.
 
Business was actually slower than usual, perhaps because people were waiting for government response to the shooting, said Wolf Laughlin, the manager of Helotes, Texas-based Gun Shack.
 
However, media coverage and recent statements by politicians on the events over the weekend were spurring buying of military style rifles, said BB&T Capital Markets analyst Brian Ruttenbur, citing an industry contact.
 
There can be a pickup in manufacturing orders, which were expected to slow this year due to decreasing consumer demand, if the buying momentum is sustained, he said.
 
While Sturm Ruger's shares were up 8.3 percent at $62.16, Smith & Wesson shares were up 6.6 percent at $22.82. Up to Friday's close, while Sturm Ruger's shares had risen about 6 percent, Smith & Wesson's stock had risen 39 percent in the past 12 months.
 
(Source:www.reuters.com) 


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