With a second straight day of significant gains on U.S. stock markets, growing numbers of investors are becoming more confident that the worst is past for stocks. News of President-elect Barack Obama’s proposed program for rebuilding the economy gave stock market players and the nation in general a reason to be optimistic that the current economic crisis can be overcome. On Monday the Dow Jones Industrial Average rose 3.46 percent, the Standard & Poor’s 500 index climbed 3.84 percent and the Nasdaq Composite Index increased 4.14 percent.
Obama has promised U.S. citizens that his administration will undertake an infrastructure development program the likes of which has not been seen in decades. The program will start off with an initial spend of $136 billion, forming part of an economic stimulus plan that will generate employment and business opportunities for companies that are struggling to keep afloat. The far-reaching program will include repairing and extending the national highway system, repairing and upgrading of airports, the construction of hospitals and schools, as well as a host of other public works related services. Although it is still more than a month until Obama takes office, the markets responded to the news with stocks of construction and engineering related companies enjoying a boost on Monday. The Dow Jones U.S. Heavy Construction index rose by more than 10 percent. Caterpillar gained 10.9 percent, Terex Corp rose 19 percent, the Shaw Group increased 16 percent, Granite Construction gained 7 percent and Jacobs Engineering climbed nearly 14 percent.
Obama’s proposed rejuvenation of the U.S. economy will include improving communication facilities, opening up opportunities for companies specializing in this field. He believes that every child in America should have access to the internet and the educational benefits that can be derived from this access. With the close relationship between Barack Obama and Bill Gates, Microsoft may very well benefit from the promotion of internet access. Gates supports education opportunities for underprivileged children through the Bill & Melinda Gates Foundation.
While Obama’s upbeat and fresh approach is encouraging; his administration will be starting off with serious economic constraints. Also, large-scale complex construction projects take time to implement and, with the recent market volatility still vividly in mind, market experts are advising investors to take a cautious approach. Nevertheless, Obama’s proposed plans, which he promises to act upon as soon as he is inaugurated, have certainly been well received, generating hopes for positive results, not only in the U.S. but on a global scale.
