Jim Cramer: Grading the Dow Earnings (Part 1)

Tickers in this article: AXP CAT DD GS HON JPM MSFT PFE PG UTX

This article originally appeared on Jan. 30, 2014, on RealMoney.com. To read more content like this plus see inside Jim Cramer's multimillion-dollar portfolio for FREE... Click Here NOW.

Almost two-thirds of the Dow Jones Industrial Average has now reported and I know that the venerable index has been clubbed of late, down 5% for the year. We have to ask if it deserves that level of punishment.

Frankly, I don't think it does.

Let's check the report cards so far, keeping in mind their potential for weakness from the emerging-market turmoil.

First, the As.

  1. JPMorgan Chase   reported among the best quarters of any of the financials, yet it has been pretty much in a straight line down since it announced its figures and, at one point, was down almost 10%. JPM has some Chinese exposure and, as part of a worldwide bank, it is always going to be impacted by emerging markets. But this is not Citigroup , which has made its bed in those peripheral countries. I think that JPM is a buy right here.
  2. American Express   had its finest quarter in years, balanced growth, expenses under control, reflecting strong individual travel and corporate travel, as well as nascent business formation. Yet it has sunk to $85 from $91, where it was before a fabulous quarter.
  3. DuPont   looked real good and, frankly, I think that its re-shaping from commodity to proprietary is going along better than expected. Yet it briefly traded all the way down to $59, where it yielded 3% from $64, where it was before the quarter.
  4. Caterpillar   gave you a performance that looks like the beginning of a multi-year turn because it was done without strong China, chiefly on the back of a better-than-expected business in the United States and huge cost takeouts. That buyback is fabulous. The stock's been too strong to get hammered here, as everyone, including many shorts, want to get in, not get out. That's something highly unusual during the Doug Oberhelman reign.

5. What can I say about Microsoft other than we would never have wanted Steve Ballmer's head if the company kept delivering this kind of quarter, with fabulous execution across everything from Windows to Surface to Enterprise and Xbox, where it was the real winner, by far, of the new console wars. Why is this stock still hanging in the high 30s? I can make a case for $40.

6. I am still reeling from how good United Technologies   was and how the business, like Honeywell , got stronger and stronger as the quarter began. Untied Tech cited non-residential construction and aerospace as two industries that are gaining momentum and it singled out China as being particularly strong. The Chinese business is long cycle, long order and is gaining, thanks to Otis, not declining. Yet it had plummeted to $111 from $116, where buyers instantly emerged.