Cramer Reveals What's Powering the Market Higher

The markets are being powered higher by a group of CEOs, Cramer said Tuesday.

These select executives recognized it wasn’t enough to play the hand they were dealt, the "Mad Money" host said. Instead, they knew they had to improve on their hand regardless of any economic weakness or what action the Federal Reserve might take. PPG Industries CEO Charles Bunch, for example, realized his company needed to get into new markets with more proprietary products. Sandy Cutler transformed Eaton from a "sleepy supplier of truck parts" to one of the world's most important energy conservation companies, Cramer said. At Honeywell International , CEO David Cote built his business into a major climate control and safety company. CSX CEO Michael Ward transformed the struggling railroad into one of the "best performing transportation companies of our era."

"Which brings us to today's action, where the positive deeds of these transformative CEOs were on display like almost never before," Cramer said. "This was a day where executives saw what needed to be done, took radical action to get there, and totally delivered on their promises."

When engine maker Cummins reported its last quarter, the market knocked its stock down. Cramer thought the market was a little hard on CEO Tim Solso, so he invited him onto "Mad Money." Solso explained how he is transforming his business into the world's premier engine technology player. Cummins' North American revenues recently rose by 50 percent while China, Brazil and India were all up in excess of 30 percent. When the market questioned why Cummins didn't raise guidance, Cramer said he thought it was being conservative.

On Tuesday, Cummins blew its previous forecast away and took up guidance in every division. As a result, the stock rallied 7.6 percent. Cramer thinks it has more room to the upside.

Meanwhile, 3M CEO George Buckley wasn't happy with his performance last year, when the stock advanced just 4 percent. To change course, Buckley set some aggressive targets during the company's March analyst day. Buckley said 3M could achieve up to 8 percent growth. The market didn't believe him, though, and the stock fell. But Buckley proved the market wrong on Tuesday by delivering growth across-the-board and success in emerging markets.

Cramer said that not too long ago, some mocked IBM CEO Sam Palmisano for selling its personal computer division to focus on developing software solutions for businesses. But IBM's market capitalization now exceeds that of Intel , Advanced Micro Devices , Dell and Seagate combined. Earlier this year, Palmisano took heat for giving five-year targets that many considered too aggressive, Cramer said. But IBM has already exceeded those targets.

The market beat up on Ford CEO Alan Mulally after the automaker's last quarter miss, which included disappointing European and North American numbers. But Ford reported a terrific quarter on Tuesday. Cramer would be a buyer of the stock, especially since he thinks it should have rallied much higher than it actually did.

Cramer caught another injustice on Tuesday when Coca-Cola was said to have reported a "disappointing" quarter. The company actually reported upside surprise with earning and volume growth that was market by the recent natural disasters in Japan. Cramer thinks it does provide for a great entry point in KO shares, though.

"The market's judgment can be severe, as it was with Coke and it can be wrong, as it was with Ford and Cummins and 3M," Cramer said. "In each of those cases I told you to have faith in management and use the market's wrongful conviction of these stocks to buy. Coca-Cola will be no different."

When this story was published, Cramer's charitable trust owned Coca-Cola.

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