For Obama, Nuclear Weapons Are a Last Resort

President Barack Obama released an updated version of the Nuclear Posture Review on Tuesday, which suggests a major shift in U.S. nuclear policy. The President, who has openly discussed his goal of making nuclear weapons obsolete, calls for preventing nuclear proliferation at the top of the U.S. nuclear agenda.

"We are going to make sure that we can continue to move toward less emphasis on nuclear weapons . . . and to make sure that our conventional weapons capability is an effective deterrent in all but the most extreme circumstances," he said. The White House is expected to release the document, called the Nuclear Posture Review, for review on Tuesday.

In the revised document, the president vowed the U.S. would not use or threaten to use nuclear weapons against nonnuclear states that abide by the Nuclear Non-Proliferation Treaty (NPT).

However, two countries are exempt from Obama's softer, kinder nuclear policy: Iran and North Korea. Both of which, he says, have violated or renounced that treaty. The president also says he wants new sanctions against Iran that "have bite." An Iranian official responded on Tuesday morning by calling sanctions threats a "joke" and said the country had no plans to abandon its nuclear activities under the threat of sanctions.

No Help for Some Defense Contractors

The release of Obama's nuclear strategy comes on the heels of a recently agreed upon U.S.-Russia arms accord, which is expected to be signed on April 8. Under that agreement, both the U.S. and Russia will cut their nuclear arsenals by nearly one-third.

Regardless of one's position on nuclear defense, one thing seems certain: The president's distaste for it isn't going to line the pockets of defense manufacturers. All the same, Obama makes it clear that the U.S. isn't giving up on investing in nuclear weapons. Among the many objectives outlined in the Nuclear Posture Review, the president says the U.S. will "modernize the nuclear weapons infrastructure, sustain the science, technology, and engineering base, invest in human capital, and ensure senior leadership focus."

Apparently, the news wasn't all that comforting to investors. Shares of defense contractors -- including General Dynamics (GD), Lockheed Martin (LMT) and Alliant Techsystems (ATK) -- all slipped in Tuesday's trading.

Obama's revised policy on nuclear weapons won't have any impact on his previous vow to provide loan guarantees on the first two nuclear power-generating reactors to be built in the U.S. since the Three Mile Island accident in 1979.