Defense Stocks Teeter on Budget Ax’s Edge

Some big cuts may still be on tap


Before Monday’s broad market selloff, shares of major U.S. defense contractors had shown some bounce after taking a hit on the prospects of staggering cuts in defense spending.

Investors initially responded to President Obama’s threat last week to carve $400 billion from the defense budget over the next 12 years by selling off big defense names like Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), Orbital Sciences (NYSE:ORB), Raytheon (NYSE:RTN) and General Dynamics (NYSE:GD)