The Wall Street Journal quotes unidentified congressional officials who were briefed on the mission as saying the satellite apparently did not separate from the second stage, and plunged through the atmosphere and burned up.
Northrop Grumman - which provided the satellite for an undisclosed US government entity - said it can not comment on classified missions.
The secret mission involved a total financial involvement of $1 billion which could be a great loss to the company if the rumors associated with the mission were even remotely true.
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SpaceX spokesman James Gleeson said: "We do not comment on missions of this nature; but as of right now reviews of the data indicate Falcon 9 performed nominally". That broke up a longtime and lucrative monopoly held by a joint venture between Lockheed Martin Corp. and Boeing Co. known as United Launch Alliance, which has had 100% mission success in its 123 launches.
During a livestream of Sunday's launch, SpaceX said it got successful confirmation that the fairing - the clamshell-like covering for payloads at the tip of the rocket - did deploy. No further requests for communication were entertained by the company regarding the mission.
The highly classified and expensive government satellite launched by a SpaceX Falcon 9 rocket from Cape Canaveral has reportedly been destroyed.
It had been described as an "expensive, highly classified USA spy satellite". However, the positive presence of the satellite in the orbit can not be confirmed. It is not as powerful as the Saturn V, the rocket which propelled astronauts into space for the 1960's and 1970's Apollo missions, but it is lighter and more efficient.
The Falcon 9 booster successfully made it back to earth under its own power.