Stay Tuned: Boeing vs. Northrop

Whether you knew it or not, today is the day you've been waiting for. At least, it is if you own shares of either Boeing (NYSE: BA) or Northrop Grumman (NYSE: NOC) -- the two key contenders in the contest to win a potential $40 billion contract to build the "KC-X Tanker" for the U.S. Air Force. Citing an Air Force source, Reuters has just confirmed that the award will be announced at 5 p.m. today.

What's it mean to you?
Expect a sharp reaction to the share price of whichever firm loses the contract, and likely a happier reaction from the winner. And more muted reactions among the firms' team members -- EADS and GE (NYSE: GE) sided with Northrop; Rockwell Collins (NYSE: COL) and United Technologies (NYSE: UTX) joined Boeing; while Honeywell (NYSE: HON) is on both teams. If you're in the mood to try to take advantage of an overreaction by Mr. Market, consider this: Estimated at $30 billion to $40 billion in value over the next 10 to 15 years, the KC-X contract represents about 10% in extra annual revenue to Northrop, but its effect -- win or lose -- will be only half as great on Boeing's fortunes.

My feeling is that anything more than a 5% drop in share price for Boeing, if it loses, would be an overreaction worthy of a buy order. Conversely, any more than a 10% spike at Northrop would be too much to pay. Trade accordingly.

Read these quick before the announcement:

• EADS Takes Ball, Goes Home
• Lockheed's Plane for All Seasons
• Defend Yourself, Fool!