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Cramer breaks down the Dow's top 10 drivers from last quarter

  • "Mad Money" host Jim Cramer looks into the group stocks that drove the Dow Jones' gains in the third quarter.
  • Only two stocks accounted for nearly 50 percent of the index's move, Cramer finds.
  • Cramer also shares the lessons he learned from examining the group.

As the Dow Jones industrial average continues to reach intraday all-time highs, CNBC's Jim Cramer decided to look back at the stocks that drove the index's gains in the third quarter.

The Dow increased by 4.9 percent in the third quarter as the stock market avoided a historically typical September downturn, so the "Mad Money" host examined the top 10 stocks responsible for the move.

1. Boeing

The aerospace giant contributed a massive 37.5 percent to the Dow's gain. Boeing's longer-than-expected order book, strong defense-oriented business and new Dreamliner aircraft model drove buyers to its shares, Cramer said.

2. Caterpillar

Caterpillar contributed 11.6 percent to the Dow last quarter. Together, Caterpillar and Boeing accounted for nearly half of the Dow's move.

"The source of CAT's strength? The company had a true blowout quarter thanks to a pickup in orders, very lean inventories and a very low table of employment. It's a big winner as China and Europe return to growth ... and you'd better believe they'll sell more equipment for the rebuild effort in the wake of the recent hurricanes here," Cramer said.

3. Goldman Sachs

The big bank's shares gave the Dow a 10.8 percent gain. While Goldman's management acknowledged that the bank's last quarter wasn't so great, the stock nevertheless got a boost from a softer regulatory environment and investor optimism about Goldman's future success.

4. Chevron

Chevron, an oil stock, accounted for 9 percent of the Dow's third-quarter move. Cramer attributed this to the company proving it wouldn't have a problem paying out its large dividend or surviving in a low-priced oil environment.

5. Visa

The move in shares of this credit card giant gave the Dow a 7.8 percent boost last quarter as Visa continued riding the global shift from paper-to-plastic.

"I think what shocked people here is that the modern-day Visa was built by Charlie Scharf, who recently left that job, but his successor, Al Kelly, seems to be handling things perfectly well. I admit I was worried when Scharf left," Cramer said. "I was wrong. Kelly's amazing. Visa's business is humming."

6. UnitedHealth

Few companies fared better than UnitedHealth when Congress failed to pass the Trump administration's plan to "repeal and replace" Obamacare, Cramer said. The health care giant contributed 7.5 percent to the Dow's gain as it pulled out of money-losing exchanges.

"Even after this run, UNH remains one of the cheapest stocks I follow and if it ever comes down, I'd love to add it to the trust," the "Mad Money" host said.

7. Home Depot

After hurricane season wreaked havoc on parts of the United States, investors rushed into Home Depot's stock as a way to play the rebuilding process. The stock's boost added 7.2 percent to the Dow.

8. Apple

The consumer technology colossus added 7.1 percent to the Dow's third-quarter move after a better-than-expected quarter and resurgence of bullish sentiment among analysts on Apple's new iPhones.

9. American Express

After a series of disappointing quarterly earnings reports, American Express bounced back with an uptick in profitability, pushing shares upward. The stock gave the Dow 4.4 percent of its gain.

10. Microsoft

Contributing 3.9 percent to the Dow's third-quarter climb, Microsoft proved that Azure was a dominant cloud-based system that helped accelerate the company's growth.

"It's become a must-own tech name for big-time portfolio managers who like growth but also want to sleep at night," Cramer said.

Lessons

All in all, Cramer learned three key things from looking at the group in its entirety:

  1. It's possible to turn skeptics into believers.
  2. When interest rates are low, solid dividends can help push stocks considerably higher.
  3. Most of these stocks were boosted by passive investments made through index funds.

"Put simply, these names went higher largely because they were the only game in town, cash-heavy stocks of companies that are doing better than we thought that could grow in an era of slow growth," Cramer said. "And that's precisely what's driving this remarkable move."

WATCH: Cramer reviews the Dow's top Q3 drivers

Disclosure: Cramer's charitable trust owns shares of Apple.

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