Executive Mosaic’s GovCon Index declined -1.55% to $5,067.31 for its worst performance in January. All three major U.S. benchmarks advanced for the fourth straight session. The broad S&P 500 Index (+0.53%) closed at a new record high, the Dow Jones Industrial Average (+0.92%) added 408 points, and the Nasdaq Composite (+0.22%) ticked higher.
Favorable corporate earnings were tailwinds for stocks. Aviation manufacturer GE Aerospace (NYSE: GE) and railroad operator Union Pacific (NYSE: UNP) popped +6.6% and +5.2% after reporting better-than-expected quarterly results. GovCon Index constituent Parsons (NYSE: PSN) was among the day’s top decliners.
Sharp Selloff
Decliners outnumbered gainers on the GovCon Index. However, the sharp selloff saw eight of the 19 losing stocks nosedive. Parsons and CACI (NYSE: CACI) tanked -10.05% and -9.35%, respectively, while Science Applications International Corp. (Nasdaq: SAIC) and Leidos (NYSE: LDOS) plunged more than 7.5%. AI stock Palantir Technologies (Nasdaq: PLTR) led 11 gainers.
Analysts at investment bank William Blair downgraded Parsons’ rating to ‘market perform’ or neutral assessment due to concerns and elevated risks over a classified humanitarian aid contract with the US State Department pending renewal in Q1 2025.
Also, on Thursday, Parsons entered into a Cooperative Research and Development Agreement with the U.S. Army Command, Control, Communications, Computer, Cyber, Intelligence, Surveillance and Reconnaissance Center to support Project Linchpin. The project is the Army’s emerging Artificial Intelligence and Machine Learning program.
CACI declined despite reporting double-digit top and bottom-line growth in Q2 fiscal 2025 versus Q2 fiscal 2024. In the three months ending Dec. 30, 2024), revenue and net income rose 14.5% and 31.1% year-over-year to $2.1 billion and $109.9 million. The company believes its strategy is “purpose-built” for the Department of Government Efficiency owing to several contracts to modernize government agencies and make them more efficient.
Sector Uncertainty
According to some market analysts, the sudden retreat of defense stocks Thursday could be due to the DOGE’s plan to reform government contracting, including a slowdown in contract spending and stringent contract terms. The goal is to reduce inefficiencies and achieve cost savings.
Market Summary
| Index | Price | Net Change | % Change |
|---|---|---|---|
| GovCon Index Daily Average | 5,067.31 | -78.37 | -1.55% |
| Dow Jones Industrial Average | 44,565.07 | 408.34 | 0.92% |
| NASDAQ | 20,053.68 | 44.34 | 0.22% |
Top 5 GovCon Index Daily Percentage Performers
| Symbol | Price | Net Change | % Change |
|---|---|---|---|
| PLTR | 78.98 | 2.11 | 2.74% |
| BA | 178.5 | 3.70 | 2.12% |
| AVAV | 181.57 | 3.69 | 2.07% |
| FLR | 55.28 | 1.02 | 1.88% |
| RTX | 126.29 | 1.91 | 1.54% |
Top 5 GovCon Index Daily Net Performers
| Symbol | Price | Net Change | % Change |
|---|---|---|---|
| ACN | 363.26 | 4.15 | 1.16% |
| BA | 178.5 | 3.70 | 2.12% |
| AVAV | 181.57 | 3.69 | 2.07% |
| HON | 225.66 | 2.57 | 1.15% |
| PLTR | 78.98 | 2.11 | 2.74% |
Top 5 GovCon Index Daily Percentage Decliners
| Symbol | Price | Net Change | % Change |
|---|---|---|---|
| PSN | 85.33 | -9.53 | -10.05% |
| CACI | 421.64 | -43.47 | -9.35% |
| SAIC | 110.57 | -9.19 | -7.67% |
| LDOS | 148.91 | -12.20 | -7.57% |
| TTEK | 39.38 | -2.40 | -5.74% |
