HOW MUCH IS THAT DOGGIE IN THE WINDOW

Sunday 6/22/08 5:15 PM CT

By Dave Harris

Sky high oil, worries with the banking sector and inflationary concerns are the big drag on stocks. The Dow Jones Industrials closed below the psychologically significant 12,000 mark Friday to 11,842.69. It's very hard to be bullish in this environment, or to really put a good valuation on some of the big blue chips. Banks, for example, are the most disliked. Last week, Citigroup (C) said more write-downs may be in the works. A company like Bank of America (BAC) is near its 52-week low at about $27. Sure, the pay a good dividend at 9.4 percent, but they could cut or eliminate it. So what are these 2 stocks worth without knowing future earnings potential? How much is that doggie? I don't think any analyst could correctly tell you. But I will say that history proves that you come out ahead by remaining bullish. Yes, the economy has its ups and downs. But like the broad Dow 30 industrials, it trends upward over the long term.

Oil is on everybody's radar. Crude rose over $134 a barrel last week and shows no signs of falling. I believe it's essential to have an oil/energy stock in your portfolio, even if you only have 5 positions. My favorites include Chevron (CVX), Devon (DVN) and Halliburton (HAL).

The recent economic data has been somewhat discouraging. Less people are working as indicated by the initial jobless claims report. Producer prices were higher than expected last month, so those costs may be passed on to shoppers. These are uncertain times, and consumers are bound to cut back on spending a touch.

In the coming week, Tuesday's consumer confidence numbers from the Conference Board will give some indication of the public's mood about economic conditions. On Wednesday, its data on housing with new home sales, but the main focus will be the Fed’s decision on interest rates. I think the central bank will pause, but increase rates next year. Don't expect a cut anytime soon. A final reading on 1^st quarter economic growth (the GDP) is due Thursday. Friday personal income and spending data comes out from the Commerce Department.

Drug store Walgreens (WAG) reports on Monday. Other notables include Nike (NKE) and General Mills (GIS) Wednesday. Thursday it's the likes of ConAgra (CAG) the food package company, Discover (DFS) credit cards and the home builder Lennar (LEN).