'Mad Money' Recap: Dow 13,000 Matters (Final)

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NEW YORK ( TheStreet) -- "Once people feel stocks aren't the enemy, we'll head higher," Jim Cramer told his "Mad Money" TV show viewers on Tuesday.

As he pondered the significance of the Dow hitting 13,000, he asked whether the milestone matters. "You bet it does," he replied.

Cramer said the Dow Jones Industrial Average isn't a closely watched indicator for professional investors, who tend to focus on the S&P 500, but for smaller investors, retail investors, Dow 13,000 could be significant. That's because up until now, the market rally has occurred with fairly few participants. But breaking 13,000 could be just want the little guys need to jump back in.

Cramer said that its true that stocks have been lost for more than a decade, and that volatility has been a major factor in keeping individuals out of the game. But on a longer time frame, stocks are still the best game in town when compared to bonds, U.S. treasuries and bank CDs, he noted, and with so many people indirectly invested in stocks via 401Ks, pensions and college savings accounts, all the markets need is a little boost in confidence.

Cramer remained bullish on high-yielding dividend stocks, names like Cedar Fair ( FUN) and American Electric Power ( AEP), especially given that dividends receive special tax treatments. He said that stocks might not be perfect, but they're definitely a lot better than they were.

Sky-High Bar

"If you can't beat them, own them," Cramer told viewers in his "Executive Decision" segment. Cramer spoke with Mark Papa, chairman and CEO of EOG Resources ( EOG), a stock that delivered a 28-cent-a-share earnings beat on a 55% rise in revenues last week. Shares of EOG are currently trading below where it reported those stellar numbers.

Papa explained the drop in EOG's share price by saying the markets were expecting "sky high" earnings, but the company was only able to deliver "very high" earnings, resulting in a feeling of disappointment. He said that despite what Wall Street thinks, he's very comfortable with the company's game plan and will continue to reduce natural gas production and ramp up oil and liquids production until natural gas prices stabilize.

When asked about those falling natural gas prices, Papa remained bearish saying that he predicts another 50-cent fall in the price of the commodity over the summer months. His outlook on oil prices however, remained strong. Papa estimated the price of oil to be between $100 and $110 a barrel, barring a conflict in Iran, based simply on rising worldwide demand.

Turning back to specifics about the company, Papa said that the company's perceived funding gap is "not a big factor" given the value of the company's assets and its growth projections. He said that with oil trading at $105 a barrel and EOG's cost of production hovering at $40 a barrel, the company enjoys "pleasant gross margins."

Papa remained bullish on the outlook for U.S. oil production, saying that horizontal drilling has turned around a 40-year downtrend in U.S. production, all without government assistance.

Cramer remained bullish on EOG, telling investors that the company is still one of his favorite oil plays.

Apple's Earnings Power

In the "Off The Charts" segment, Cramer went head to head with colleague Dan Fitzpatrick over the chart of Apple ( AAPL), a stock which Cramer owns for his charitable trust, Action Alerts PLUS.

Fitzpatrick looked at a weekly chart of Apple since 2009, noting that the stock has seen accelerated buying in recent weeks, signaling a buying climax pattern. He said that Apple's rally began on weak volume, then increased in volume as the rally continued, a sign that momentum players were piling in.

But looking at the longer term, Fitzpatrick also noted that this has been the pattern for Apple as of late, the stock shoots up big, only to experience a sideways or slightly downward period of consolidation over the weeks or months that follow. He said the rally appears done, for now, until all of the momentum players get flushed out of the stock.

Fitzpatrick's only caveat, if Apple were to break through its highs of $526 a share, then the stock would be poised for still another move higher.

Cramer said he doesn't care about the charts when it comes to Apple. He said that earnings power is all that matters for this tech juggernaut. With the company elected to earn upwards of $55 a share in earnings, Cramer said he would step up and buy Apple on any weakness, while noting that he agrees with Fitzpatrick that there might not be any immediate urgency to buy in after such a massive move higher.

Steady Recovery

For his second "Executive Decision" segment, Cramer once again welcomed David Steiner, president and CEO of Waste Management ( WM), to the show for an update on the company's outlook.

Steiner said that Waste Management is seeing a steady recovery in trash volumes, a trend he expects to see continue throughout 2012. In the hard hit Florida economy, Steiner said the company is not seeing a dramatic turn, but rather a stabilization as that region of the country continues to recover. He said his company is committed to finding solutions for their customers that are also at the right price and margins for the company.

Delving a little deeper into Waste Management's businesses, Steiner explained that the company is both a user and a producer of natural gas. He said the company's trucks run on natural gas, which is helped by lower gas prices, but it also produces gas at its landfill facilities, and those are obviously hurt by lower prices. Waste Management is also affected by commodity prices, said Steiner, as its recycling businesses produce all sorts of raw materials that flow back into the system.

Cramer gave kudos to Steiner for the company's near 4% dividend yield. Steiner said the company remains committed to its shareholders and its dividend will continue to play an important role for the company. Cramer reiterated his buy recommendation on Waste Management.

Lightning Round

Cramer was bullish on Ralph Lauren ( RL), Phillips-Van Heusen ( PVH) and VF Corp ( VFC).

Cramer was bearish on RR Donnelley ( RRD), Hanesbrands ( HBI), Regeneron Pharmaceuticals ( REGN), ZAGG ( ZAGG), Salesforce.com ( CRM) and Netflix ( NFLX).

No Huddle Offense

Cramer said it's always good to think about what could go wrong in the economy. His top worry? Gasoline at $5 a gallon.

Cramer said that in 2008, when gasoline hit a high of $4.11 a gallon, it had a huge impact on the economy. And in today's market, gas prices are clearly hinged on the building conflict with Iran. He said unlike 2008, where prices were largely controlled by speculators, today those prices are on the doorstep of Iran. Cramer said that gas prices won't likely go lower until the conflict is resolved or the world economy slows to where demand for gasoline falls dramatically.

Closing Comments

In his closing comments, Cramer removed outgoing Johnson & Johnson ( JNJ) CEO, William Weldon, from his Wall of Shame list of the worst CEO's. He said that after so many product recalls under Weldon's tenure, wealth will have to be created for J&J shareholders now that he's retiring.

Cramer also had bullish words for Home Depot ( HD), which reported a strong quarter after the close today.

--Written by Scott Rutt in Washington, D.C.

To contact the writer of this article, click here: Scott Rutt.

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At the time of publication, Cramer was long Apple.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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