Gun stocks edge higher after NY AG Letitia James sues to dissolve the NRA

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Shares of gun makers edged higher Thursday, but pared earlier gains, after New York Attorney General Letitia James filed suit seeking to dissolve the National Rifle Association (NRA), charging “illegal” conduct. James alleges the pro-gun organization violated non-for-profit laws by diverting “millions of dollars away from the charitable mission of the organization for personal use by senior leadership,” and awarding contracts to financially benefit associates and family. Smith & Wesson Brands Inc.’s stock rose 0.3%, but had been up as much as 6.9% earlier in the session; and Sturm Ruger & Co. shares tacked on 0.7%, after being up as much as 2.8% earlier. Analysts say the regulatory environment is among the biggest drivers of demand for guns, as fears of tighter regulations have often boosted gun sales and prices of gun stocks in the past. Meanwhile, ammunition and outdoor gear maker Vista Outdoor Inc.’s stock shot up 16% toward a record high, after the company reported a surprise fiscal first-quarter profit, sales that rose above forecasts and provided an upbeat outlook. Year to date, shares of Smith & Wesson have nearly tripled (up 181%) and Sturm Ruger have nearly doubled (up 84%), while the S&P 500 has gained 2.9%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.