Defense stocks could soon shore up their bottom lines, thanks to Uncle Sam.
U.S. congressional defense committees announced Wednesday that they support a $700 billion defense spending plan that would offer a boost to troop presence and government-backed spending on fighter jets and ships.
Congressional Armed Services Committees agreed to the National Defense Authorization Act, or NDAA, which would follow President Donald Trump's plans to bolster military spending and global presence. It calls for $700 billion in defense spending during fiscal 2018, which began Oct. 1.
The act would increase the U.S.'s active troops to more than 16,000. But its purchasing plan could offer a welcomed boom in defense stocks.
The plan calls for the purchase of 90 F-35 fighter jets from Lockheed Martin Corp. (LMT - Get Report) . The NDAA also outlines purchasing plans for new Navy ships, including an Arleigh Burke-class destroyer from General Dynamics Corp. (GD - Get Report) and Huntington Ingalls Industries Inc. (HII - Get Report) , plus three Littoral Combat Ships from Lockheed and Australia's Austal Ltd. (AUTLY) .
The $700 billion spending plan comes in above last year's $619 billion NDAA budget. For fiscal 2018, the Pentagon alone would get $692 billion under this iteration of the NDAA.
In order to become law, the NDAA must pass the House and Senate and get signed into law by President Trump. The bill has passed every year since 1961.
Lockheed stock was up 0.6% to $314.92 Wednesday afternoon, and Huntington Ingalls gained 1.4% to $250.76. General Dynamics stock was lower 0.3% to $203.17.
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