Cramer: Dow Industrials

At the beginning of each year I like to take a fundamental look at the 30 stocks in the Dow Jones industrial average. This year, with the Fed on the team, many stocks look more attractive than ever.

So here's the quick and dirty:

AT&T: Numbers here are way too high and I don't care about this restructuring. Get Armstrong out of there and I'll listen. Keep wireless, sell everything else if you want to break up the parts. Business and long-distance are just plain awful no matter how you dice it.

Alcoa: Perfect stock after a second ease. Not as well run as it was under Treasury Secretary-designate Paul O'Neill, but Alcoa is a market-share giant and can coin money when the economy gets hot. Much better company coming out of a slowdown than it ever has been because of the acquisitions it made this time around.

American Express: People are worried about earnings, yet I think this company is a pure play on the Fed easing. We may end up missing Golub, but Chenault impresses as someone who can get the job done just as well. Seems like a buy to me.

Boeing: Last year this one was my favorite, but now it seems a little long in the tooth. I wonder if the easy money hasn't been made, although I respect the fact that airplane cycles generally last longer than this one has so far. Hold it.

Caterpillar: Premier cyclical that does best after second ease, according to the textbooks. This time will be no different. Well-run company, good market-share leader. Needs stronger economy and will get it.

Citigroup: One of the best names in the Dow, with earnings that held up surprisingly well during a period of securities slowdown. Best pick to double in the averages.

Coca-Cola: Still overvalued and really is just a play on the Fed not easing fast enough. I don't want to make that bet.

Disney: Stock doing well coming off the first ease. Seems like it could rally back to $40 but needs to see some sort of expense control and a clear No. 2 to Eisner to impress me. Wouldn't hurt to have a new cartoon blockbuster, and without it, I don't think the stock goes past $40. Already had a nice run.

Dupont: Great second-ease play. Can't jump the gun though, as earnings are still too soft.

Eastman Kodak: Favorite Dow stock of the Trading Goddess, who figures that they have to get it together eventually. I see the yen coming way down and I don't want to play. Fuji's got the edge. Wait till next year.

Exxon Mobil: I want to own this one down here for safety and capital appreciation. I think there are tons of costs to take out and this will be a good, steady, albeit boring stock to own. Nothing the matter with boring.

General Electric: If you want to bail out on Jack's last year, be my guest. I think this one is a must-own for 2001, and it will be super every time the Fed eases.

General Motors: I hate this company, but in this environment, GM always works and I don't want to outthink this. Own it for nine months and thank me.

Hewlett-Packard: Even lowly H-P will get a boost if the Fed eases aggressively, but I would much rather play cyclical tech with IBM.

Home Depot: These folks are struggling of late but they have a new boss, and retail works when the Fed eases. That said, I prefer Target, Best Buy and Kohl's to HD.

Honeywell: See GE.

International Business Machines: All this and cyclicality to boot. IBM can be owned for the rest of the year as it will be a proxy for GDP growth off Fed eases.

Intel: Don't like it.

International Paper: This stock will be in a foot race with Alcoa to $50 if the Fed eases twice more. You want to be there.

Johnson & Johnson: Too defensive a name to own in the midst of Fed eases. Probably bides time all year at around these levels. Great company though, so I can't advocate selling it.

J.P. Morgan: This one could go much higher as it takes out costs, resurrects some deals out of venture capital and makes giant loans and underwritings. Well positioned for eases; strong buy.

McDonald's: Great defensive name, but the environment doesn't call for it. Strong hold, especially because expansion is now in check and no longer willy-nilly. Very well-run now.

Merck: If you have to have one drug stock, which I think you should, make it Merck. Will surprise again this year because of sheer ingenuity. Monstrously well-run. Stay long. And buy a little more down here.

Microsoft: Total wild card but I don't want to be levered to personal computers. I still don't care for this stock, but it ranks as a hold because the worst is over.

Minnesota Mining & Manufacturing: Don't wait for the second ease on this one. Change of management dictates buy right now.

Philip Morris: This will be year two of out-performance for this company, as it splits into two and pays a giant yield relative to where the Fed is going to take short rates in 2001. Still an aggressive buy.

Procter & Gamble: Maybe a tad too defensive during the easing, so hold but don't buy. Mid-60s, get aggressive; new CEO making all the right noises.

SBC Communications: Pure telco play that should be bought because it will be able to buy lots of competitors, given its great balance sheet. Too defensive right now to appreciate big, but situated very correctly.

United Technologies: A great defense and industrial play that will do well after the second ease. Has had a nice aerospace lift already from engine orders, but much more to come.

Wal-Mart: You buy retail when the Fed eases. This retailer is the consummate retailer, but because of its foreign investments, it is no longer a pure play.

James J. Cramer is a director and co-founder of He contributes daily market commentary for the network of TSC sites and serves as an adviser to the company's CEO. Cramer from time to time writes about stocks in which he has a position. In such cases, appropriate disclosure is made. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.