Dow Watch: Reader Email Edition

Readers sound off with their view of the Dow Jones Industrial Average and the equity market at large.
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(At 3:20 p.m. EDT)

The

Dow Jones Industrial Average

continues to hold close to the unchanged mark today, so I figured this lull in action is a good time to open up the Dow Watch mailbag and share some reader emails.

On Monday, I asked whether the Dow's recent ascent could be classified as a giant

melt-up

, and I noted the recent rash this morning of better-than-expected housing data. An anonymous emailer argued that while new-home sales data are good for indicating whether people are beginning to buy houses again, it isn't a good measure of what will happen in the industries related to housing.

"

My own sense as I watch the market is that all of this is, perhaps, besides the point: the market's relation to the real economy is not strong and stocks can probably continue to rise as long as investors have faith and there are few massive bankruptcies. The real world is irrelevant if no one pricks the bubble.

"

An email today from Lucia B. (edited to remove a number of expletives on par with a

Timothy Geithner

meeting) suggests that the recent jump in

Caterpillar

(CAT) - Get Report

shares is "beyond stupid" and that the company's "fundamentals could not be more horrendous."

"

Hedge funds and...Goldman Sachs (GS) - Get Report keep throwing stupid money at the stock. So, the 'little' investor may catch a few bucks on the ride. Stupid lucky, I call it. CAT should be $25. The market is totally manipulated...Does the average schmuck know flash trading exists? The little guy? Clueless, as ever! Volume from the little guy is non-existent. Golly, we wonder why anyone with half a brain has left the freaking market for good.

"

And last, Cliff L. questions why there is little public outrage over secret investment strategies of larger firms, especially if they caused devastation in the market in the first place.

"

I find it incredible that the financial press and investment pundits have overlooked the fact that our stock markets are not experiencing any large sell programs that were an everyday occurrence prior to July 11. This is the reason our markets are adjusting upward from a very oversold condition.

"

As always, I welcome all reader feedback, so please

email me

and let me know your reaction to the Dow's action.

-- Written by Robert Holmes in New York

.

(At 11 a.m. EDT)

NEW YORK (

TheStreet

) -- It seemed like only days ago that a surge in

Caterpillar

(CAT) - Get Report

shares meant that the

Dow Jones Industrial Average

would be trading well into the black.

Actually, it was two weeks ago, when Caterpillar posted a better-than-expected second-quarter profit and increased its guidance for 2009. Since then, Caterpillar's stock has jumped 23%. It's no coincidence that the Dow climbed 5% during that time.

Today, however, a 4.3% climb in Caterpillar shares could only keep the Dow at the flat line. Earlier, CEO Jim Owens reaffirmed the company's 2009 outlook for revenue in a range of $32 billion to $36 billion with a 2009 adjusted profit range of $1.15 to $2.25 a share.

Owens said there is "far too much uncertainty" to know when the global economy will turn toward positive growth, but he argued Caterpillar will benefit when the recovery comes.

As if the Caterpillar news weren't good enough for bulls, the National Association of Realtors delivered yet another better-than-expected report on the housing market. Pending home sales rose 3.6% in June, above the 0.7% consensus and good for the report's fifth straight gain. May's number was revised higher, too.

If you'll recall, housing data released in the last few weeks have all been stronger that most economists have expected. Last week, new home sales data for June showed a better-than-expected rise to 384 million units. In the week prior, the National Association of Realtors said existing home sales rose 2.5% to 4.89 million units, above the census estimate of 4.84 million.

Despite all of this, trading on the Dow was choppy in the first two hours Tuesday, with the blue-chip average barely able to stay in positive territory. Twenty of the Dow's 30 components were in the red, lead by 1% declines in

American Express

(AXP) - Get Report

,

Microsoft

(MSFT) - Get Report

and

Alcoa

(AA) - Get Report

.

It's hard to tell whether traders should be encouraged that the Dow is holding close to yesterday's close, especially considering the bearish commentary I've seen everywhere, or whether investors should be disheartened that another climb in Caterpillar shares and good housing data have gone unrewarded today. I would love to hear your thoughts, so please

email me

and let me know what you're taking away from the Dow's action today.

-- Written by Robert Holmes in New York

.