SMITH & Wesson climbed the most in two months to lead a rally among firearms manufacturers as traders speculated that Barack Obama's re-election would spur gun sales.
Smith & Wesson, a maker of pistols and rifles, jumped 7.8pc to $10.20 (€8) in early US trading in New York following an 11pc gain that was the biggest in intraday trading since September 7.
Investors are wagering that more Americans will buy guns after the win by Mr Obama, who said last month he would consider reintroducing a ban on civilian purchases of military-style assault weapons.
Firearm sales have grown at 10pc annually since 2008, when Mr Obama was elected, compared with 7pc from 2001 to 2007, according to Benchmark Co.
"While we maintain our view that these political sales do not represent the entirety of recent firearms sales growth, we expect that with President Obama's re-election these sales could continue well into his second term," Mike Greene, an analyst at New York-based Benchmark, wrote.
Mr Obama broached the idea of trying to revive the assault- weapons ban, which lapsed in 2004, during a debate with Republican presidential nominee Mitt Romney. His comment followed criticism from gun-control advocates, who said he had done too little to restrict access to firearms.
The Brady Campaign to Prevent Gun Violence gave him its lowest grade of F after his first year in office for "failed leadership" on the issue.