What sequester? Handily beating the S&P 500 this year are two aerospace and defense ETFs,...

What sequester? Handily beating the S&P 500 this year are two aerospace and defense ETFs, ITA and PPA. Both have added to gains the last few sessions as top holdings Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), and General Dynamics (NYSE:GD) all posted earnings beats even as defense spending has been slashed. International and commercial orders are helping, but so are long-term contracts. "We are not out of the woods at all," says Boeing CEO Jim McNerney on the earnings call (transcript). "We are entering the woods."