Defense Equipment Firms, Security Specialists See Big Gains

Updated from 1:06 p.m. EDT

Few sectors went unscathed in Monday's stock market drubbing, as investors found little comfort even in traditional safe havens. But with the nation gearing up for a battle with terrorism, defensive and aerospace stocks got a clear vote of confidence.

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Northrop Grumman (NOC Quote) soared 15.7% to close at $94.80 on the New York Stock Exchange. Raytheon (RTN Quote) gained 26.8% to $31.50, while Lockheed Martin (LMT Quote) rose 14.7% to $43.95.

The news was not as good among consumer staples, where stocks ended mixed. Gillette (G Quote) was off 1.6% to $30.70, while Procter & Gamble (PG Quote), managed to close up 0.5% to $74.55 after being in the red for most of the day. Soft-drinks giant Coca-Cola (KO Quote) also shrugged off earlier losses, finishing up 0.9% to $50.20, and cigarette king Philip Morris (MO Quote) also finished higher by 2.7% to $48.90.

Security device makers posted impressive gains, with some stocks in the sector doubling in value. InVision Technologies (INVN Quote), which manufactures explosives scanners that are being deployed in airports, soared 165.3% to $8.25 on the Nasdaq.

Face recognition technology company Viisage Technology (VISG Quote) climbed 142.3% to $4.70, and Visionics (VSNX Quote) gained 93.2% to $8.25, and rival Identix (IDX Quote) climbed 71.4% to $7.20 on the American Stock Exchange. Security services firm Wackenhut (WAK Quote) rose 26.7% to $21.15.

Phone companies, which have been scrambling to restore over-burdened phone lines in New York City, finished lower. Verizon Communications (VZ Quote) closed down 1.8% to $49.80, and BellSouth (BLS Quote) drifted down 0.6% to $39.50. AT&T (T Quote) lost 0.7% to $17.52.

Meanwhile, shares of mobile phone giant Nokia (NOK Quote) gained 12.3% to $15.44, though rivals Ericsson (ERICY Quote) and Motorola (MOT Quote) ended down.

Brokerage stocks, which might have lost a combined billion dollars in profit from the attack, fell sharply. Merrill Lynch (MER Quote) tumbled 11.5% to $41.48, while Morgan Stanley (MWD Quote) ended trading off 13.1% to $42.50. Goldman Sachs (GS Quote) slipped 8.9% to $69.40 and Lehman Brothers (LEH Quote) gave up 11.1% to $55.16. Online brokerage Charles Schwab (SCH Quote) lost 14.4% to $10.07.