Beware the Obama stimulus

Construction stocks accept surged back the acclamation on hopes of added basement spending. But some stocks accept run up too much.

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

Yes, even in this abhorrent ambiance for the markets and economy, traders were assertive to acquisition a area to pump up.

This time about it's construction, and arch stocks in this area accept surged on the apprehension that President-elect Barack Obama will advance for added spending on basement as allotment of an bread-and-butter bang package.

In just the accomplished anniversary alone, shares of construction-management close Fluor Corp (FLR, Fortune 500). accept acquired 17% and energy-engineering aggregation Shaw Accumulation (SGR, Fortune 500) has skyrocketed 22%

Some of these stocks began to run up even afore the acclamation in the hopes of an Obama victory. Shares of architect and architecture abstracts maker Granite Architecture (GVA) are up about 70% in the accomplished month. Engineering close URS (URS, Fortune 500) has soared 65%.

Investors charge to be alert here.

Yes, it's acceptable that abounding of these firms would accept some banking lift from added spending on highways and added projects.

Talkback: Will added spending on basement advice the economy?

But any new business from a bang amalgamation ability not be abundant to account absent business stemming from a anemic economy.

"There has been a focus on who will account from basement stimulus. la computer repair While these companies will get plan from it, I don't apperceive how cogent the account will be," said Chase Jacobson, an analyst with Sterne Agee. "I do anticipate that the runup actuality is a little overdone. Next year for these companies ability be okay, but there's a huge catechism mark about 2010."

Jacobson said that while investors are absorption on the abeyant access in public-works projects, abounding architecture firms await added on added areas of the economy, such as the activity sector.

Jacobs Engineering (JEC, Fortune 500), for example, is a aggregation he follows that may get some new business as a aftereffect of added basement spending. But it would not move the punch on the company's sales or profits all that much, he thinks

"To do plan on a artery or body a baby arch - that bulk is annihilation in allegory to architecture a refinery," he said.

Matt Kaufler, co-portfolio administrator of the Touchstone Value Opportunities fund, agreed that investors should not blitz into basement stocks just because of the achievement of added bang spending.

Kaufler said his armamentarium owns shares of Shaw Accumulation but not because he expects a concise bang pop. Instead, he's captivation the banal for the long-haul because he believes Shaw is the best aggregation to account from a all-around buildout of power-generating infrastructure.

So like with any industry, investors should do their appointment and not blindly buy a banal just because it's perceived to be in a hot sector. With any group, there will consistently be losers as able-bodied as winners. A big alarm on an absolute area is a chancy move.

Anyway, blessed Thanksgiving to all. I achievement that none of you are traveling to being yourself with a Turgooduccochiqua. Yuck!