While the military coup in the Soviet Union has given the stock market as a whole a real case of the jitters, it has pumped new life into defense-sector stocks that had already earned good conduct medals during the Persian Gulf war.
Paul H. Nisbet, defense analyst with Prudential-Bache Securities, noted yesterday that makers of military equipment have seen the prices of their stocks double since Iraq's invasion of Kuwait and are now benefiting from the crisis in the Soviet Union.
Mr. Nisbet listed Martin Marietta Corp., Lockheed Corp., Raytheon Co. and McDonnell Douglas Corp. as stocks his company has upgraded from "hold" to "buy" status. General Dynamics Corp. was upgraded from "sell" to "hold."
The analyst said that the defense industry had a negative image among investors before the Persian Gulf war but benefited from a lot of free publicity from television coverage of the conflict.
He foresees the crisis in the Soviet Union reversing the trend in Washington toward freezing the budgets of strategic weapons systems such as the B-2 bomber, Trident missile and MX intercontinental ballistic missile.
Despite their big gains of the past year, Mr. Nisbet said that defense stocks are "still relatively low-priced" and would be the likely beneficiaries of any new market psychology stemming from long-term defense spending as a result of the Soviet crisis.
Bethesda-based Martin, he said, will continue to benefit from its Titan IV program, building rockets used by the military to place "very large strategic satellites into orbit." He said that the company's half-billion-dollar Indigo LaCrosse radar surveillance satellite program also will get a boost from the current world situation.
Raytheon's Patriot missile system also will probably get new attention.
Mr. Nisbet said that his company put McDonnell Douglas Corp. on its "buy" list Monday morning. "Thank goodness we did," he said about two hours before the market closed yesterday. "It jumped from 48 [dollars a share] to 55.
Westinghouse Electric Corp., a diversified company that has the bulk of its defense operations in Maryland and draws a lower percentage of its total sales from military contracts than the more conventional defense contractors, posted a slight gain yesterday. Its shares closed at $22.625, up 12 1/2 cents.
Others cautioned that the Soviet situation remained too fluid to assess its long-term fallout.