Financial Markets                      01/08 09:36

   

   NEW YORK (AP) -- U.S. stock indexes are drifting at the start of Thursday's 
trading, masking some big gains underneath the surface for makers of weapons 
and other military equipment after President Donald Trump said he wants to 
increase spending on them sharply

   The S&P 500 slipped 0.2% in early trading, coming off its first loss in four 
days, though it remains near its all-time high set earlier this week. The Dow 
Jones Industrial Average was down 109 points, or 0.2%, as of 9:35 a.m. Eastern 
time, and the Nasdaq composite was 0.4% lower.

   Yields ticked higher in the bond market following mixed data on the U.S. 
economy. The number of U.S. workers applying for unemployment benefits rose 
last week, an indication of increasing layoffs, but by no more than economists 
expected. Other reports, meanwhile, said U.S. workers improved their 
productivity by more in the summer than economists expected, while the U.S. 
trade deficit unexpectedly shrank in October.

   On Wall Street, defense-industry companies jumped to some of the biggest 
gains after Trump said he wants to increase U.S. military spending to $1.5 
trillion in 2027 from $901 billion in order to build the "Dream Military."

   Northrop Grumman soared 8.2%, Lockheed Martin climbed 8.8% and L3Harris 
Technologies jumped 8%. They more than made up their losses from the prior day, 
when Trump complained defense contractors were making military equipment too 
slowly.

   RTX came under particular criticism by Trump, and its stock rose less than 
peers. It added 3.4% after Trump said that it was the "slowest in increasing 
their volume."

   Trump signed an executive order Wednesday calling on the Pentagon to ensure 
future contracts with contractors contain a provision prohibiting their ability 
to buy back their own stock during a period of underperformance on U.S. 
government contracts.

   Elsewhere, oil prices jumped to continue their zigzags since Trump ousted 
the leader of Venezuela last weekend.

   A barrel of benchmark U.S. crude climbed 2.1% to $57.18. Brent crude, the 
international standard, rose 2% to $61.14 per barrel.

   Venezuela is potentially sitting on the largest oil deposits in the world, 
and any increase in production could push further downward on prices, which 
have already been falling on expectations for plentiful supplies. But it would 
also likely require billions of dollars of investment to get Venezuela's aging 
infrastructure in good-enough shape to ramp up production sharply.

   It's not just Venezuela where the U.S. military could see action. Trump in 
recent days has also called for taking over the Danish territory of Greenland 
for national security reasons and has suggested he's open to carrying out 
military operations in Colombia.

   In stock markets abroad, indexes fell across much of Europe and Asia.

   Japan's Nikkei 225 dropped 1.6% for one of the world's bigger moves, while 
Hong Kong's Hang Seng fell 1.2%.

   In the bond market, the yield on the 10-year Treasury rose to 4.18% from 
4.15% late Wednesday.

   ___

   AP Business Writers Chan Ho-Him and Matt Ott contributed.

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