Get Even More Bullish on the Dow, Part 2

Editor's note: This is Part 2 of Jim Cramer's review of the prospects for the stocks that make up the Dow 30. Be sure to read Part 1, Part 3 and Part 4.

Caterpillar Second-half surge

Caterpillar(CAT Quote): They killed CAT this year because of housing. I believe the first half of 2007 will look much like the last half of 2006, but this time with the engines business stalling out, too. That's because a change in environmental laws led to pullthrough of orders into 2006 in that important market. That, plus the leveling of oil at a price that doesn't spur enough alternatives, will weigh on Caterpillar. But the second half will be more bountiful because housing will have bottomed and the engine orders will flow back. Look for nothing until July and then a quick spurt to new highs, perhaps even $90, as the raw cost of steel, now that tariffs are removed, flows through to the bottom line.

Citi Needs a new leader

Citigroup(C Quote): The rumblings of Citigroup will be heard, and Chuck Prince will be gone by year-end 2007. The market thirsts for a big-thinking banker at the helm of this ship to augment the new operations chief, and the market will get it. I believe Citigroup will trade to $63 on improved management and the concomitant prospects. ...