Gun stocks tend to rise after mass shootings.
The shares of gun manufacturers are reversing earlier gains in trading Thursday after the deadliest mass shooting of the year.
At least 17 people died in the shooting at Marjory Stoneman Douglas High School in Parkland, Florida. 19-year-old Nikolas Cruz, the suspected gunman, was armed with an AR-15 semiautomatic rifle and "countless magazines," the Broward County Sheriff's Office said.
American Outdoor Brands, formerly Smith & Wesson, fell 2% after gaining as much as 4% in early trading, while Sturm, Ruger & Co. fell by nearly 1%. Olin Corporation, which makes ammunition, also fell 1%. They had closed up on Wednesday.
Gun stocks tend to rise after mass shootings because of speculation that people would want to buy firearms sooner rather than later before any new regulations are introduced.
But the Trump administration has not been a boom for gun companies. Sturm Ruger, for example, said demand was stronger than normal in 2016 likely because of election campaigning, but then tanked in 2017. Its third-quarter earnings per share fell in half from the prior year.