10 Underperforming Dow Stocks in 2010

Jim Cramer took a look at the 30 Dow Stocks on yesterday’s Mad Money program. After the Dow Jones index hit a 52-week high in January, the market has been encountering resistance to getting back to that level and beyond.

Mr. Cramer took a look at the 10 underperforming Dow stocks in 2010 that appear to be holding back the Dow Jones index.

American Express (AXP: 51.64 0.00%) – despite the stock being down 2% for the year, Cramer wouldn’t be surprised to see the financial stock rally 12%. Corporate travel is coming back and Cramer has a $45 price target for AXP.

Exxon Mobil (XOM: 85.32 0.00%) – has declined 2% this year and has failed to rally despite oil prices climbing to $80 per barrel. Cramer feels than until the deal with XTO Energy (XTO: 0.00 N/A) goes through, the energy stock is going to remain range bound. Cramer mentioned that he would be surprised if the stock goes up more than 3 points in the near future.

Chevron (CVX: 106.76 0.00%) – despite the recent positive statements by Chevron at an analyst meeting, Cramer recommends that investors sell the stock.

IBM (IBM: 192.95 0.00%) – while Cramer expects that IBM is having a good quarter and will likely report great earnings next month, the stock is likely stuck in neutral until then.

Coca Cola (KO: 68.33 0.00%) – Cramer believes that Coke won’t be moving up from its 5% decline any time soon.

Pfizer (PFE: 21.01 0.00%) – Cramer labeled Pfizer as the “Lusitania of the Dow” and predicts that the stock will lose another $1.

Microsoft (MSFT: 30.66 0.00%) – Windows 7 appears to be selling very well and Cramer doesn’t expect Microsoft to stay low much longer. Cramer set a $32 price target for Microsoft.

AT&T (T: 30.02 0.00%) and Verizon (VZ: 37.92 0.00%) – the price war between these two telecom giants has resulted in both declining over 10% this year. However, Cramer predicts a recovery for both companies in the near future and expects that both will raise their dividends this year. His price target for AT&T is $28; while his price target for Verizon is $33.

Alcoa (AA: 10.67 0.00%) – has been the Dow’s biggest loser in 2010 with a 15% decline. Cramer still doesn’t recommend the stock despite their strong cash flows.

However, there are a few shining stars among the Dow components as well. Cramer pointed to Cisco Systems (CSCO: 20.43 0.00%), McDonald’s (MCD: 100.05 0.00%) and Bank of America (BAC: 8.13 0.00%).