Shares in U.S. Gun Makers Climb After Orlando Mass Shooting

Previous shootings have seen similar phenomena, as many rush to buy guns because they fear harsher gun control measures will be enacted.

Gun enthusiasts look over Sig Sauers guns at the National Rifle Association's annual meetings & exhibits show in Louisville, Kentucky, May 21, 2016.
John Sommers II / Reuters

Shares in a number of major gun manufacturers rose strongly on U.S. stock markets just a day after the deadliest mass shooting in U.S. history on Sunday, in which 50 people died and at least 53 were wounded at a gay club in Orlando, Florida.

While such mass killings lead to renewed calls for stricter gun control laws, in practice Congress and state legislatures have done little on the issue in the wake of other mass killings; while many rush to buy guns quickly because they fear such gun control laws may be enacted. In addition, gun sales rise steeply as more people buy guns in what they see as one of the ways to protect themselves.  

Smith & Wesson Holding Corp. shares were up 10%, while those of Sturm, Ruger & Co Inc. rose over 10% in morning trading in New York. Shares in other firearm manufacturers, such as Vista Outdoor, which owns Savage Arms and Federal Premium ammunition, also rose strongly. 

Smith & Wesson sold a record $627 million of guns and firearm accessories last year and is expected to post even higher sales this year. 

The Orlando rampage - carried out by Omar Mateen, a New York-born Florida resident and U.S. citizen - was denounced by President Barack Obama, who had previously blasted congressional inaction on gun control.

A large number of firearms manufacturers, including Smith & Wesson and Sturm, Ruger, make the AR-15 semi-automatic rifle used by Mateen in his killing spree. 

Gun sales jumped in January after President Obama vowed to use executive powers to expand background checks for buyers and bolster licensing requirements for dealers.

The announcement had followed the mass shooting in San Bernardino, California, where a couple pledging allegiance to Islamic State killed 14 people.

Gun sales slowed in May according to adjusted data from National Instant Criminal Background Check System, which process applications to own firearms.

Sales were up only modestly from a year earlier, compared with expectations for a double-digit rise, BB&T Capital markets analyst Brian Ruttenbur wrote last week. He had also cut his rating on Sturm, Ruger to "hold" from "buy".

Up to Friday's close, Smith & Wesson stock had risen 39 percent in last 12 months, while Sturm, Ruger had risen about 6 percent.

Reuters contributed to this report