Updated from 12:05 p.m. EST
Following the space shuttle Columbia disaster over the weekend, investors on Monday sold off shares of some of the shuttle program's contractors.
, which builds the shuttle's solid rocket boosters, were the hardest hit, falling nearly 12% in heavy volume. Meanwhile, shares in
, the shuttle's primary contractors, also traded down on Monday.
The selloff in Alliant shares in particular could continue, noted Pierre Chao, an analyst with Credit Suisse First Boston, in a research note issued on Monday. The company derives between 15% to 18% of its sales and profits from the shuttle program, and investors likely will focus on its exposure to a prolonged grounding in the shuttle fleet, Chao wrote.
"As much as we would like to hope otherwise, we believe there will be some inevitable panic around (Alliant shares)," he wrote, lowering his rating on Alliant from outperform to neutral. (Credit Suisse has received investment banking business from Alliant in the past 12 months.)
Alliant shares closed in regular trading on the
New York Stock Exchange
down $6.34, or 11.7%, to $48.02.
In contrast, shares in Boeing and Lockheed Martin traded down less than 3% each on Monday. Boeing closed down 48 cents to $31.11, while Lockheed Martin traded off $1.50 to $49.55.
Boeing is estimated to generate about $2 billion, or almost 4%, of its $54 billion annual revenue from manned space operations, while Lockheed gets about $700 million a year of its $26.2 billion in sales from the shuttle.
, which play smaller roles in the shuttle program, also saw their shares fall on Monday. Moog shares traded down $1, or 3.1%, to $30.90. Honeywell closed down 21 cents, or 0.9%, to $24.23.
It remains unclear what the impact of Saturday's disaster will be on the program and its contractors. For now, work continues on an upgrade of the shuttle Discovery and at least two launches are scheduled for this year. Experts expect the timetable to be moved out and note that after the shuttle Challenger exploded in 1986, no launches occurred for more than two years.
Chao noted, however, that there is no current replacement for the shuttle.
"As a result, we believeit is very likely that the program will move forward once it is deemed safe," he said.