Construction-related stocks soar on infrastructure plans

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‘Buy first, ask questions later.’

That’s the theme today on Wall Street, at least with stocks of companies that could benefit from President-elect Obama’s massive infrastructure-spending plans.

U.S. Steel was up $7.24, or 25%, to $36 at about noon PST. Pasadena-based Jacobs Engineering was up $7.12, or nearly 17%, to $49.55 and Caterpillar gained $4.72, or 12%, to $42.98.

The Dow Jones industrial average was up 342.40 points, or 4%, to 8,977.82, the fourth advance in the last five sessions.

Obama gave a broad outline of the program over the weekend, promising to make the largest investment in the nation’s infrastructure since President Eisenhower launched the interstate highway system in the 1950s.

Although this shouldn’t be a big surprise to investors -- Obama had previously signaled his desire to focus spending on improving roads, bridges, etc. -- Wall Street bulls have to be heartened by the market’s response: It suggests people are looking for 2009 opportunities, as opposed to remaining hunkered down for fear of deeper losses.

The mentality for much of this year, after all, had been, ‘Sell first, ask questions later.’

For some infrastructure-related stocks, today’s advances are adding to what were already hefty gains in recent weeks.

Jacobs, for example, has surged nearly 90% since hitting a multiyear low of $26.27 on Nov. 20. Rival Fluor Corp., up $5.90, or 13%, to $50.94 at about noon PST, has jumped more than 70% since bottoming at $29.56 on Nov. 20.

Cement giant Cemex, up $2.03, or 27%, to $9.36 so far today, is up 128% since Nov. 21.

For the moment, it’s far from clear which companies will be the big winners under Obama’s program, or how soon.

‘The government is going to spend a lot of money,’ said Sam Burns, senior equity strategist at State Street Global Markets in Boston. ‘But there’s the practical reality -- how long before it takes effect? It could be quite a while.’

But for Wall Street bulls, it’s an encouraging sign that some investors and speculators are willing to extend their time horizons well into 2009. That’s the only way this market will be wrested away from hour-to-hour traders.

<-- Tom Petruno