Today Defense Secretary Gates announced his changing priorities for how the $534 billion defense budget should be spent.

50% of the money in the budget should go to programs meant to counter conventional threats, about 10% to programs useful only in irregular war and 40% to programs that are useful to both.

In other words, the Pentagon is moving away from programs for conventional war – which is now deemed a unlikely threat – and focusing more on surveillance and gathering intelligence. First up on the chopping block: the Army’s new armored vehicles, Air Force’s F-22 fighter, and the Navy’s new destroyers and cruisers.

Just after Gates made these announcements, Lockheed Martin began to plummet. Yet by the end of the day it was up about nine percent due to rumors of a possible merger, thus proving how difficult it is to try and trade off of the news the Obama administration puts out.