NEW YORK (AP) -- Shares of defense contractors edged lower Monday as the federal government moved toward a shutdown that could affect payment and future orders to the companies.

A partial shutdown will begin at midnight unless Congress passes a bill funding further operations. House Republicans are insisting that as a condition for funding the government, parts of the 2010 health care overhaul must be delayed. The Democratic-controlled Senate has rejected those terms.

Citi Investment Research analyst Jason Gursky said the situation and other recent legislative impasses have been weighing on defense stocks.

"The shutdown and debt ceiling debates add to the molasses that's slowing (Defense Department) decision-making and creating so much uncertainty," he said. A shutdown would affect the Department of Defense's ability to pay bills, he said.

But he thinks that defense stocks are still inexpensive for investors. He added that the fiscal 2015 budget, which should be unveiled early next year, could give the stocks a boost.

Stifel Nicolaus analyst William Loomis said a short shutdown won't hurt defense contractors too much. He said a shutdown would hurt government services companies more than defense manufacturing firms.

Moody's Investors Service said the industry would "struggle to withstand payment disruptions," which could soon affect their ability to pay off debts. Moody's said Boeing and General Dynamics have both diversified into commercial aerospace and have retained more cash, so they are less vulnerable than some of their competitors.

As broader markets declined, trading in shares of major defense companies Monday:

  • Alliant Techsystems stock dipped $0.67 to close at $97.56.
  • Boeing shares lost $1.24, or 1% , to $117.50.
  • General Dynamics stock slid $0.77 to $87.52.
  • Lockheed Martin shares fell $1.69, or 1.3%, to $127.55.
  • ManTech International stock lost $0.04 to $28.76.
  • Northrop Grumman declined $0.99, or 1%, to $95.26.
  • Raytheon shares gave up $1.12, or 1.4%, to $77.07.
  • Rockwell Collins shed $0.73, or 1.1%, to $67.86.
  • United Technologies stock slipped $1.54, or 1.4%, to $107.82.

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