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TheStreet.com's Jim Cramer says it looks like the patent worries aren't so dire after all.

Now that we see that health care reform is not going to bring price caps or socialization of medicine, we are beginning to see some real expansion in the drug stocks, including Merck (MRK) (Cramer's Take), Bristol-Myers (BMY) (Cramer's Take) and Lilly (LLY) (Cramer's Take). But there is one drug stock that is continually met with skepticism -- Sanofi Aventis (SNY) (Cramer's Take), the French vaccine and pharmaceutical maker run by Christian Viehbacher. The resistance is obvious, as his biggest two drugs are coming off patent very soon, and his hope is that by 2013 the company might again reach 2008 levels.

Sounds like there's no reason to buy this one. Sounds like its 4% dividend isn't safe.

The clock is ticking away the time before the year ends and I have only begun to sort out the possibilities. In Part 1 of this series, I discussed breaking up my potential picks into three categories: contender, on the fence, and out of the running until the 10 stocks have been identified.

Four contenders have been considered so far: American Eagle Outfitters (AEO), Anadarko Petroleum (APC), Anglo American ADR (AAUKY) and Diageo plc (DEO).

Six more are included in today's review: EZCorp Inc. (EZPW), General Electric Company (GE), Wells Fargo & Company (WFC), Annaly Capital Management ( NLY), Intuitive Surgical Inc (ISRG) plus Berkshire Hathaway (BRK.B). These include the remaining five from 2009 and one more familiar to most investors.

A lot of earnings reports were issued last week. The market was busy sorting them all out. I'm going to take a fast look at several of the issuing companies.

American Express (NYSE: AXP): Don't leave home without it. Good advice for the card, perhaps, but what about the company? Should your portfolio leave home and forget this stock? I'd say so. It's not that American Express lost the earnings game. On the contrary, Bloomberg reported a beat. American Express earned 44 cents per share from continuing operations, adjusted. This was six pennies ahead of forecasts. Okay, I applaud such performance. And shares are way off the single-digit 52-week low. Thing is, I'm in love with another card business. Visa (NYSE: V). As I've stated before, I enjoy the beauty of Visa's lower-risk model. It doesn't have to put up with loan risk. Yes, the situation at American Express might be improving, but I'm not going to buy this one.

One of my wonderful friends, Ms. P, asked me for some guidance on how she might allocate $50,000 currently earning peanuts in a money market account. Though she is decades from becoming a grandmother, after a brief discussion about her financial parameters, it became clear to me that she was looking for a "granny fund."

In reality, my recommendations would be suitable, and perhaps desirable, for many passive investors as well.

The $50,000 is a portion of money Ms. P has set aside to purchase a home, which might happen in six months, but could also be pushed out further, depending on the economy and her situation. Basically, she wants to cover all her bases because she might need the money at any time and does not want to be caught short, while at the same time she would like to generate some revenue without taking any big risks.

"The Dogs of the Dow strategy has a long-term history of outperforming the Dow Jones average," notes technical expert Gerald Appel.

In his Systems & Forecasts, he explains, "The theory is that the highest yielding stocks are undervalued and should have the greatest change of appreciating." Here, he reviews the five highest yielders.

"In calculating a formal track record for the strategy, dividend yields are ranked on the last trading day of each year. However, there is no reason why you are limited to ranking stocks only at the end of the year.

"The current market climate appears favorable for using this strategy to garner investment income, since market risk appears below normal and investment income is getting hard to come by.

Merck (NYSE: MRK) closed at $32.68. The Schering-Plough (NYSE: SGP) and Merck merger is expected to close before year end. SGP shareholders will receive 0.5767 shares and $10.50 in cash for each share of SGP. MRK October and January option implied volatility of 31 is below its 26-week average of 37, according to Track Data, suggesting decreasing price movement.

Pfizer (NYSE: PFE) closed at $16.77.Pfizer is expected to close on the acquisition of Wyeth (NYSE: WYE) for $33 in cash and 0.985 of a share of Pfizer by the end of 2009. PFE October option implied volatility is at 26, December is at 31; below its 26-week average of 36, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Although earnings for Merck (NYSE: MRK) were down in the last quarter, the stock is gaining momentum.

The pharmaceutical giant reported a 3% decrease in sales to $5.9 billion from $6.05 billion in the year-earlier period. Earnings were $1.56 billion or 74 cents per share, compared with $1.77 billion or 82 cents per share in the same quarter a year ago.

A strong dollar and lower sales for cholesterol and vaccine drugs contributed to Merck's decline this quarter. But investors were cheered by the fact that Merck reaffirmed its annual earnings forecast of $2.84 to $3.09 per share.

Although the headlines are screaming about how companies are beating their earnings estimates, little newsprint is being devoted to this quarter's real story.

That story is that revenues for many corporations are way down year over year, and more importantly, their top-line revenues are often coming in below Street estimates.

To be certain, there have been some real success stories so far in Q2, and we'll be talking about some of those in a moment. Moreover, it is always a good sign when companies beat their earnings estimates.

TheStreet.com's Jim Cramer says the plunge in China overnight is being blamed on the industrial metal, so expect some carry-over.

It turns out copper was the metric. Drats, I thought it was the dollar or oil. I thought we were supposed to buy the cyclicals on earnings being better than expected. I thought we might be buying the minerals and the steels and the oils off the morning proxy of the Baltic Freight Index, known as the Baltic Fright Index in the days when it kept going down, and kept us out of the Freeports (NYSE: FCX) (Cramer's Take) and Vales (NASDAQ: VALE) (Cramer's Take) and Union Pacifics (NYSE: UNP) (Cramer's Take) and U.S. Steels (NYSE: X) (Cramer's Take).

Silly me.

TheStreet.com's Jim Cramer says health care has never been this cheap relative to the market in its history.

Health care's not done rallying. As President Obama prepared himself for claiming a great political victory, we are all recognizing that the single-payer, socialized medicine covering cradle-to-grave, 100% paid for by the rich, the fear that left all things health care in the P/E dustbin, is dead. That's not going to happen.

That leaves us with the biggest bargains the market has to offer.

Health care has never been this lowly valued relative to the market in its history. Remember, 98% of the time it trades at a meaningful premium. I think that many believe some of these moves (like the Celgene (NASDAQ: CELG) (Cramer's Take) move) is because of gigantic new drug finds. In fact, I think they just got too cheap and the only thing really meaningful about the Celgene rally came because one of its Revlimid studies was stopped for good results, actually a predictable event given how well the drug works on many different kinds of cancers.

Here are some highlights from last week's earnings coverage from BloggingStocks:

• Amazon.com Inc. (NASDAQ: AMZN) met Q2 earnings estimates but fell short of revenue expectations.
• Coca-Cola Co. (NYSE: KO) lower Q2 results beat expectations, lifted by strength in non-cola beverages.
• Continental Airlines Inc. (NYSE: CAL) reported net loss was accompanied by a job cuts announcement.
• Ford Motor Co. (NYSE: F) surprised with a Q2 profit due mainly to a huge gain from debt reduction.
• Hasbro Inc. (NYSE: HAS) posted better-than-expected Q2 earnings due to Transformers and G.I. Joe toys.
• Hershey Co. (NYSE: HSY) posted strong numbers for Q2 and also raised its full-year guidance.

Pharmaceutical company Merck (NYSE: MRK), whose colleagues include Pfizer (NYSE: PFE) and Johnson & Johnson (NYSE: JNJ), issued its Q2 numbers earlier in the week. Quite frankly, I found them to be boring. Of course, maybe boring isn't too bad these days, right? It's a lot better than an exciting ride on a profit-decline express.

Well, actually, Merck did see a decline in its bottom-line profit, but it wasn't an outrageously awful drop or anything like that. Merck made an adjusted 83 cents per share compared to an adjusted 86 cents per share in the comparable period. Three less pennies isn't the worst thing in the world on a relative basis. Plus, revenues increased 3% if you exclude currency effects (including them gives a decrease of 3%).

Today's news boiled down to two issues. First was that five DJIA components reporting earnings this morning, with details on three components. The second issue was Ben Bernanke testifying that inflation was not a huge concern because the economy is likely to stay frail for some time. The markets were mixed to down most of the day until a late day rally saved shares.

Here were today's unofficial closing bell levels:

Dow 8,911.71 +63.56 (0.72%)
S&P 500 954.10 +2.97 (0.31%)
Nasdaq 1,914.13 +4.84 (0.25%)

Top 10 Analyst Upgrades/Downgrades

"Following last year's dismal market performance, investors are looking for something they can be sure of in the year ahead; and for income investors, that means finding a safe and rewarding dividend yield," says Carla Pasternak.

In her High Yield Investing, she offers a fascinating review to find the "safest dividend in the Dow." Here's her assessment.

"The 30 members of Dow Jones Industrial Average represents some of the strongest names in America. So these corporate titans are a good place to start searching for the safest dividend.

"The first step in the process is not to look at the Dow at all, but to start with the 10-year Treasury note, currently yielding 3.86%.

Pfizer (NYSE: PFE), a pharmaceutical entity whose colleagues include Merck (NYSE: MRK), Novartis (NYSE: NVS), and Johnson & Johnson (NYSE: JNJ), will be reporting first-quarter earnings Tuesday. As one has come to expect, the market believes that the company will be experiencing a decline in bottom-line income. The call is for 49 cents per share versus 61 cents per share in the year-ago period.

That's a drop of 20%. That might not sound so hot, but the good news is that Pfizer has a solid recent track record when it comes to beating earnings expectations. So shareholders might be justified in feeling confident about that aspect of the game.