Gulf peace slams defense stocks.

Gulf peace slams defense stocks

Stocks of Los Angeles County defense companies, which have performed strongly during the Persian Gulf War, slipped last week on word that peace was at hand in the six-week-old conflict.

"People are taking advantage of the run-up in defense stocks by selling on the good news," said John Simon, a defense analyst with Seidler Amdec Securities in Los Angeles.

"I think we're seeing profit-taking as a reaction to the inevitable cessation of hostilities," said Lawrence Harris, an industry analyst in the Los Angeles office of Kemper Securities Group.

The analysts said the showing is due to investors recognizing the continuing long-term decline in defense spending, despite the war. In early February, the Bush Administration submitted a budget that calls for stiff defense budget cuts and the cancellation of several programs.

McDonnell Douglas Corp. and General Dynamics Corp., two industry giants with facilities in Los Angeles County including Douglas Aircraft Co. in Long Beach, both slipped last week by more than $1 a share.

Calabasas-based Lockheed Corp.'s stock, which had been surging during the past month, also lost ground and was trading in the $38 to $39 range after reaching a 52-week high of more than $42 a share.

Stock at another Los Angeles-based company, Northrop Corp., also slipped last week, falling 75 cents to $24.25 a share one day last week.