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Jan.24

3:23 PM ET

Thursday, 24 Jan 2008

Stop Trading!: Trading the Stimulus Package

Posted By:Tom Brennan

Topics:Stock Picks | Stock Market

Sectors:Retail | Aerospace & Defense

Cramer called a huge rate cut from the Federal Reserve and a stimulus package from Washington "monumental," during Thursday's Stop Trading!.

Just this afternoon, leaders from both sides of the aisle and Treasury Secretary Henry Paulson announced tax rebates for individuals and write-offs for businesses, and increased the cap on the loan amount government-backed mortgage lenders Fannie Mae [FNM Loading... () ] and Freddie Mac [FRE Loading... () ] could buy.

That loan cap increase will help builders like Toll Brothers [TOL Loading... () ] and banks like Washington Mutual [WM Loading... () ], Cramer mentioned, and the extra cash in consumers' pockets should help the retail sector.

With so many different forces at work, a lot of other sectors in the market should start to work in time, Cramer said.

In earnings news, Northrop Grumman [NOC Loading... () ] posted flat profit for the fourth quarter Wednesday. Cramer said he's a fan of CEO Ronald Sugar, but his favorite play in defense is Raytheon [RTN Loading... () ].

Earlier in "Street Signs," Erin Burnett aired pieces of her interview with Dubai World Chairman Sultan Ahmed Bin Sulayem, who's looking for U.S. investments. Given the sovereign wealth fund's ownership of retailer Barneys New York, Cramer recommended Dubai World consider Saks [SKS Loading... () ], Jones Apparel [JNY Loading... () ], Liz Claiborne [LIZ Loading... () ], Nordstrom [JWN Loading... () ] and the Gap [GPS Loading... () ].

Jim's charitable trust owns Raytheon.

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