The grim predictability of stock-market reactions to U.S. mass shootings - where before a final tally of casualties can be reached, shares of gun makers rise - continued in the wake of a Las Vegas attack that killed at least 58 and wounded 515.
Historically, gun stocks have experienced a bump after a mass shooting for reasons both political and emotional. Gun sales typically rise over concerns that a deadly event could lead to more stringent gun-control legislation. An additional driver of sales, and by extension shares, is the rush by some consumers to purchase guns to defend against future attacks.
Authorities said that Stephen Craig Paddock opened fire from the 32nd floor of the Mandalay Bay Resort, high above a crowd attending the nearby Route 91 Harvest Festival concert. The shooter, originally reported to have been killed by officers, may have shot himself before they entered his hotel room, police said. As local hospitals worked to treat the injured, the south end of the iconic Las Vegas Strip was shut down. The motives of the 64-year-old white gunman remain unknown, police said.
As news of the attack spread this morning, firearm-related stocks began to rise. Olin Corp., the maker of Winchester ammunition, rose almost 6 per cent by midday New York time. American Outdoor Brands Corp., formerly Smith & Wesson Holding Corp., was up about 4 per cent and Sturm Ruger & Co. rose 4 per cent. Following the Pulse nightclub shooting in Orlando, Fla., last summer, which left dozens dead, Sturm Ruger and Smith & Wesson saw stock prices increase. The same phenomenon occurred after the San Bernardino, Calif. shooting in late 2015, which left 14 dead.
In the past, gun rights supporters and organizations such as the National Rifle Association have warned of future regulatory efforts Democratic administrations may try to impose using a mass shooting as justification. This pattern continued throughout the Obama administration, even when the Democratic Party lost control of the House and Senate. Things could turn out differently, however, now that Republicans control the White House and both houses of Congress.
