Obama to focus on infrastructure

WASHINGTON/CHICAGO: President-elect Barack Obama is focusing his economic recovery strategy on making the biggest investment in the nation’s infrastructure since President Dwight D Eisenhower created the interstate highway system a half-century ago.

Speaking Sunday at a Chicago news conference and on NBC’s “Meet the Press,” Obama said state governors have many such projects that are “shovel ready,” meaning they could be undertaken swiftly and have an immediate impact on jobs.

He declined to specify a price tag for the stimulus, saying his advisers are “busy working, crunching the numbers, looking at the macroeconomic data to make a determination as to what the size and the scope of the economic recovery plan needs to be. But it is going to be substantial.”

The remarks sparked a stock market rally, with oil and mining shares leading indexes higher in Europe and Asia. The MSCI World Index added 2.7% to 871.09 at 10.01am in London. Futures on the Standard & Poor’s 500 Index expiring in December surged 2.4% to 893.1.

Obama’s plans to invest in infrastructure led to gains in shares of construction and engineering companies that may benefit from the higher public spending and demand for products.

The Standard & Poor’s Construction and Farm Machinery Index rose 7% at 9.52am. Manitowoc Co Inc, was the largest gainer in the group with a 14% increase.

Caterpillar Inc, the world’s largest maker of construction equipment based in Peoria, Illinois, rose US$2.38 (RM8.64) or 6.2% to US$40.64 at 9.33am in New York Stock Exchange composite trading.

Jacobs Engineering Group Inc of Pasadena, California, rose US$3.84 or 9% to US$46.27 in New York. It is the second-largest publicly traded US engineering company. — Bloomberg