Beware the Obama stimulus bubble

By Paul R. La Monica, CNNMoney
2008-11-26 12:19:09

NEW YORK (CNNMoney.com) -- Death and taxes...and overexuberance by investors.

Yes, even in this terrible environment for the markets and economy, traders were certain to find a sector to pump up.

This time around it's construction, and leading stocks in this sector have surged on the expectation that President-elect Barack Obama will push for more spending on infrastructure as part of an economic stimulus package.

In just the past week alone, shares of construction-management firm Fluor Corp (FLR, Fortune 500). have gained 17% and energy-engineering company Shaw Group (SGR, Fortune 500) has skyrocketed 22%

Some of these stocks began to run up even before the election in the hopes of an Obama victory. Shares of contractor and construction materials maker Granite Construction (GVA) are up nearly 70% in the past month. Engineering firm URS (URS, Fortune 500) has soared 65%.

Investors need to be cautious here.

Yes, it's likely that many of these firms would receive some financial lift from increased spending on highways and other projects.

	Investment Basic Investment Overview Investment Approache Fundamentals Data Investment Stories www.fxj108.com	Beware the Obama stimulus bubble By Paul R. La Monica, CNNMoney 2008-11-26 12:19:09 NEW YORK (CNNMoney.com) -- Death and taxes...and overexuberance by investors. Yes, even in this terrible environment for the markets and economy, traders were certain to find a sector to pump up. This time around it's construction, and leading stocks in this sector have surged on the expectation that President-elect Barack Obama will push for more spending on infrastructure as part of an economic stimulus package. In just the past week alone, shares of construction-management firm Fluor Corp (FLR, Fortune 500). have gained 17% and energy-engineering company Shaw Group (SGR, Fortune 500) has skyrocketed 22% Some of these stocks began to run up even before the election in the hopes of an Obama victory. Shares of contractor and construction materials maker Granite Construction (GVA) are up nearly 70% in the past month. Engineering firm URS (URS, Fortune 500) has soared 65%. Investors need to be cautious here. Yes, it's likely that many of these firms would receive some financial lift from increased spending on highways and other projects.