1231 GMT - The U.S. military action in Venezuela could reinforce the need for Europe to take more responsibility for its own security and increase its defense spending, Morgan Stanley analysts say. This would underpin Morgan Stanley's overweight rating on the European defense sector, according to a research note. The intervention seemingly shows the Trump administration's focus on issues closer to home, the analysts say. U.S. defense stocks largely shrugged off recent U.S. boat strikes in the Caribbean, but the ousting of Venezuelan leader Nicolas Maduro marks a potentially significant escalation, they add. Significant escalation from here in Venezuela isn't priced into U.S. defense stocks as of Monday, they note. Rheinmetall is up 7.3%, Leonardo advances 6.25%, BAE Systems gains 5% and Thales increases 4.8%. (cristina.gallardo@wsj.com)

(END) Dow Jones Newswires

January 05, 2026 07:31 ET (12:31 GMT)

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