Any Kind of Return - Cramer's Stop Trading! (10/2/08)

Includes: BP, DD, MCD, NYX, TROW
by: Joan Wickham

Recap of Jim Cramer's comments on Stop Trading! Thursday October 2.

Commodities Crash

The recent commodities crash rivals that of the Nasdaq’s decline after the dot-com bubble burst, Cramer said. “Except for those companies were phony,” Cramer said. “These are actually real companies,” and they’re being hit regardless of how strong their core business is. Cramer blamed the drop in commodities on hedge-fund redemptions. Clients want their money back, and hedge funds are scrambling to raise it. Big mutual funds like Fidelity and T. Rowe Price wouldn’t sell if their holdings were dropping this fast, so they can’t be blamed. “When you see really high-quality American companies down 60%, 70% in three weeks, that’s not Fidelity banging them out,” Cramer said. “They just don’t do that. It’s people who have to bang them out.”

To Get Any Kind of Return – T. Rowe Price (NASDAQ:TROW), DuPont (NYSE:DD), McDonald’s (NYSE:MCD), BP (NYSE:BP), NYSE Euronext (NYSE:NYX)

With investors looking for any kind of return they can find in this market, Cramer recommend DuPont and McDonald’s for their dividends. The former does have exposure to the troubled agriculture and housing sectors, but DuPont is a “very well-run company.” McDonald’s recently raised its dividend, and Cramer said Skinner "would not raise the dividend knowing that things are falling off the cliff." BP is also worth considering, Cramer said. Dropping oil prices make this stock a “real wildcard,” but there are virtually no other big oil-services names that offer dividends. He knows oil stocks are heading down, but "you've got to start looking at these." NYSE Euronext, the bane of Cramer’s charitable trust for much of 2007, might be cheap enough to buy again. CEO Duncan Niederauer seems to have “really solidified things with that yield and that buyback." “If that stock goes back to its 52-week low,” Cramer said, “I’m going to say buy it.”

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